Southwest Airlines (LUV) Stock Analysis

November 11, 2026

This is a peer-relative look at Southwest Airlines (LUV): its performance, risk, profitability, growth, financial strength, dividend, and valuation are each measured against its Transportation peers, so every number reads in context rather than in isolation.

Company Profile

Company profile fields for Southwest Airlines (LUV)
Profile Item	LUV
Name	Southwest Airlines Co.
Country/Region	United States
GICS Sector	Industrials
GICS Industry Group	Transportation
GICS Industry	Passenger Airlines
GICS Sub-Industry	Passenger Airlines
Market Capitalization	21.76 billion USD
Currency	USD
Exchange	NYSE
Listing Date	January 2, 1980
Security Type	Common Stock

Price Performance

Cumulative Growth

LUV

GSPC

Southwest Airlines (LUV) vs. S&P 500 (GSPC): Growth of a $10,000 investment over the past five years. Adjusted for dividends and splits.

Trailing Returns

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Trailing total returns for Southwest Airlines (LUV) and S&P 500 (GSPC). Returns over one year are annualized.

Calendar-Year Returns

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Calendar-year total returns for Southwest Airlines (LUV) and S&P 500 (GSPC). Each bar is that year's total return, measured year-end to year-end.

Performance Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
Total Return (1Y)	44.35%	22.71%
Total Return (3Y, Annualized)	28.08%	14.66%
Total Return (5Y, Annualized)	-0.31%	3.98%

Risk Profile

Drawdown History

LUV

GSPC

Southwest Airlines (LUV) vs. S&P 500 (GSPC): Drawdown from the running peak over the past five years. Each line shows the decline from its prior peak; 0% marks a new high.

Return Distribution

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Distribution of monthly total returns for Southwest Airlines (LUV) and S&P 500 (GSPC). Each bar is the share of months whose return fell in that 5% bucket.

Risk Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
Volatility (1Y, Annualized)	44.46%	40.42%
Beta (5Y)	1.19	1.15
Max Drawdown (5Y)	-55.39%	-52.44%

Risk-Adjusted Performance

Risk-Return Positioning

Each dot is a stock plotted by 1-year volatility (risk) and 1-year return. LUV is highlighted; the dashed line is the Capital Allocation Line from the risk-free rate through the industry median — dots above it are stronger on a risk-adjusted basis.

Risk-Adjusted Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
Sharpe Ratio (1Y)	0.90	0.46
Sortino Ratio (1Y)	1.51	0.70

Profitability

ROE (TTM)

Southwest Airlines (LUV) posts ROE of 13.94%, roughly around the peer group’s normal range. Shareholders’ equity is producing a return that looks broadly typical for the industry.

LUV

Transportation industry group

13.94%

Group distribution

Max: 45.08%
Q3: 22.02%
LUV: 13.94%
Median: 13.94%
Q1: 2.89%
Min: -10.45%

Largest peers

UNP: 38.75%
UPS: 28.65%
CSX: 26.39%
CNI: 22.45%
LUV: 13.94%
UBER: 12.33%
CP: 8.27%

Where Southwest Airlines (LUV) stands on ROE within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Net Margin (TTM)

Southwest Airlines (LUV) keeps 3.34% of revenue as net profit, roughly in line with the peer group’s normal net margin range. Its full cost stack is taking a typical share of sales for the industry.

LUV

Transportation industry group

3.34%

Group distribution

Max: 50.36%
Q3: 21.18%
Median: 5.58%
LUV: 3.34%
Q1: 1.55%
Min: -11.37%

Largest peers

UNP: 28.90%
CNI: 26.42%
CP: 24.14%
CSX: 23.97%
UBER: 6.13%
UPS: 4.84%
LUV: 3.34%

Where Southwest Airlines (LUV) stands on net margin within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Operating Margin (TTM)

Southwest Airlines (LUV) turns 4.49% of revenue into operating profit, in the lower peer quartile for operating margin. Operating costs are taking a larger share of sales than they do at most peers.

LUV

Transportation industry group

4.49%

Group distribution

Max: 59.18%
Q3: 29.30%
Median: 11.50%
Q1: 4.62%
LUV: 4.49%
Min: -8.91%

Largest peers

CNI: 41.52%
UNP: 41.34%
CSX: 39.26%
CP: 38.56%
UBER: 9.80%
UPS: 9.28%
LUV: 4.49%

Where Southwest Airlines (LUV) stands on operating margin within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Profitability Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
ROE (TTM)	13.94%	13.94%
ROA (TTM)	3.05%	4.95%
Net Margin (TTM)	3.34%	5.58%
Operating Margin (TTM)	4.49%	11.50%
Gross Margin (TTM)	22.14%	27.25%

Growth

Revenue Growth

Southwest Airlines (LUV) grew revenue 2.11%, roughly around the peer group's normal range. Top-line momentum looks broadly typical for the industry.

Southwest Airlines (LUV): Revenue Growth across different time periods, set against Transportation industry-group medians.

EPS Growth

Southwest Airlines (LUV) grew earnings per share 3.95%, roughly around the peer group's normal range. Bottom-line momentum looks broadly typical for the industry.

Southwest Airlines (LUV): EPS Growth across different time periods, set against Transportation industry-group medians.

Growth Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
Revenue Growth (YoY)	2.11%	2.80%
Revenue Growth (3Y CAGR)	5.63%	1.66%
EPS Growth (YoY)	3.95%	-10.61%
EPS Growth (3Y CAGR)	-3.16%	-7.47%

Financial Strength

Current Ratio (MRQ)

Southwest Airlines (LUV) has current ratio of 0.47, in the tighter-liquidity quartile for its industry. The short-term cushion is thinner than most peers carry, even if the absolute comfort level still depends on the business model.

LUV

Transportation industry group

0.47

Group distribution

Max: 2.58
Q3: 1.62
Median: 1.16
Q1: 0.78
LUV: 0.47
Min: 0.22

Largest peers

UPS: 1.24
UBER: 1.23
UNP: 1.16
CSX: 0.84
CNI: 0.82
CP: 0.52
LUV: 0.47

Where Southwest Airlines (LUV) stands on current ratio within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Debt / Equity (MRQ)

Southwest Airlines (LUV) has debt-to-equity ratio of 0.94, roughly in line with the peer group’s normal leverage range. Its mix of debt and equity looks typical for the industry.

LUV

Transportation industry group

0.94

Group distribution

Max: 2.75
Q3: 1.37
LUV: 0.94
Median: 0.78
Q1: 0.35
Min: 0.00

Largest peers

UPS: 2.03
UNP: 1.41
CSX: 1.35
CNI: 1.09
LUV: 0.94
UBER: 0.61
CP: 0.55

Where Southwest Airlines (LUV) stands on debt-to-equity ratio within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Financial Strength Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
Current Ratio (MRQ)	0.47	1.16
Debt / Equity (MRQ)	0.94	0.78
Net Debt / EBITDA	1.21	2.00

Dividends

Dividend Yield (TTM)

Southwest Airlines (LUV) has dividend yield of 1.62%, in the industry’s normal income range. It provides a meaningful dividend without the red flag of an unusually high headline yield.

LUV

Transportation industry group

1.62%

Group distribution

Max: 4.68%
Q3: 1.99%
LUV: 1.62%
Median: 0.74%
Q1: 0.00%
Min: 0.00%

Largest peers

UPS: 5.91%
CNI: 2.87%
UNP: 1.87%
LUV: 1.62%
CSX: 1.08%
CP: 1.06%
UBER: 0.00%

Where Southwest Airlines (LUV) stands on dividend yield within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Dividend Payout Ratio (TTM)

Southwest Airlines (LUV) has payout ratio of 35.12%, within the industry’s typical payout band. The dividend shares profits with investors while leaving earnings coverage that looks normal for the peer group.

LUV

Transportation industry group

35.12%

Group distribution

Max: 100.89%
Q3: 41.68%
LUV: 35.12%
Median: 20.43%
Q1: 0.00%
Min: 0.00%

Largest peers

UPS: 126.40%
CNI: 45.63%
UNP: 43.37%
LUV: 35.12%
CSX: 28.65%
CP: 22.91%
UBER: 0.00%

Where Southwest Airlines (LUV) stands on payout ratio within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Dividend Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
Dividend Yield (TTM)	1.62%	0.74%
Dividend Payout Ratio (TTM)	35.12%	20.43%

Valuation

P/E Ratio (TTM)

Southwest Airlines (LUV) trades at P/E ratio of 21.68, near the industry’s usual earnings multiple. The stock is not showing a clear peer discount or premium on trailing earnings.

LUV

Transportation industry group

21.68

Group distribution

Max: 46.76
Q3: 30.87
LUV: 21.68
Median: 20.58
Q1: 10.44
Min: 0.00

Largest peers

UBER: 40.35
CP: 29.54
CSX: 25.58
UNP: 22.63
LUV: 21.68
CNI: 21.61
UPS: 20.87

Where Southwest Airlines (LUV) stands on P/E ratio within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

P/S Ratio (TTM)

Southwest Airlines (LUV) trades at 0.69 on P/S ratio, roughly in the peer group’s normal range. The market is not making a strong cheap-or-rich statement about its revenue base.

LUV

Transportation industry group

0.69

Group distribution

Max: 4.35
Q3: 2.07
Median: 0.93
LUV: 0.69
Q1: 0.53
Min: 0.04

Largest peers

UNP: 6.54
CSX: 6.09
CP: 5.01
CNI: 4.05
UBER: 2.48
UPS: 1.01
LUV: 0.69

Where Southwest Airlines (LUV) stands on P/S ratio within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

P/B Ratio (MRQ)

Southwest Airlines (LUV) trades at 2.97 on P/B ratio, roughly in line with the industry’s normal price-to-book range. Its balance sheet is not being priced at a clear discount or premium versus peers.

LUV

Transportation industry group

2.97

Group distribution

Max: 6.29
Q3: 3.39
LUV: 2.97
Median: 1.90
Q1: 1.03
Min: -2.07

Largest peers

UNP: 7.83
CSX: 6.29
UPS: 6.15
UBER: 5.06
CNI: 4.77
LUV: 2.97
CP: 2.46

Where Southwest Airlines (LUV) stands on P/B ratio within its Transportation peer group — the box is the group’s distribution and the dots its largest members.

Valuation Metrics

Southwest Airlines (LUV) metric values compared with Transportation industry-group medians
Metric	Current stock: LUV	Industry group median
P/E Ratio (TTM)	21.68	20.58
P/S Ratio (TTM)	0.69	0.93
P/B Ratio (MRQ)	2.97	1.90
Free Cash Flow Yield (TTM)	-2.82%	3.36%