AAL vs. LUV: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at AAL and LUV, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
LUV’s market capitalization of 19.42 billion USD is significantly greater than AAL’s 7.71 billion USD, highlighting its more substantial market valuation.
With betas of 1.38 for AAL and 1.23 for LUV, both stocks show similar sensitivity to overall market movements.
| Symbol | AAL | LUV |
|---|---|---|
| Company Name | American Airlines Group Inc. | Southwest Airlines Co. |
| Country | US | US |
| Sector | Industrials | Industrials |
| Industry | Airlines, Airports & Air Services | Airlines, Airports & Air Services |
| CEO | Robert D. Isom Jr. | Robert E. Jordan |
| Price | 11.69 USD | 34.08 USD |
| Market Cap | 7.71 billion USD | 19.42 billion USD |
| Beta | 1.38 | 1.23 |
| Exchange | NASDAQ | NYSE |
| IPO Date | September 27, 2005 | January 2, 1980 |
| ADR | No | No |
Historical Performance
This chart compares the performance of AAL and LUV by tracking the growth of an initial $10,000 investment in each. Use the tabs to select the desired time period.
Data is adjusted for dividends and splits.
Profitability
Return on Equity
AAL
-15.15%
Airlines, Airports & Air Services Industry
- Max
- 42.21%
- Q3
- 26.98%
- Median
- 13.01%
- Q1
- 0.37%
- Min
- -17.14%
AAL has a negative Return on Equity of -15.15%. This indicates the company is generating a loss for its shareholders, which can be a result of unprofitability or negative shareholder equity and is often a sign of financial distress.
LUV
5.38%
Airlines, Airports & Air Services Industry
- Max
- 42.21%
- Q3
- 26.98%
- Median
- 13.01%
- Q1
- 0.37%
- Min
- -17.14%
LUV’s Return on Equity of 5.38% is on par with the norm for the Airlines, Airports & Air Services industry, indicating its profitability relative to shareholder equity is typical for the sector.
Return on Invested Capital
AAL
4.12%
Airlines, Airports & Air Services Industry
- Max
- 17.34%
- Q3
- 13.78%
- Median
- 4.53%
- Q1
- 1.05%
- Min
- -13.54%
AAL’s Return on Invested Capital of 4.12% is in line with the norm for the Airlines, Airports & Air Services industry, reflecting a standard level of efficiency in generating profits from its capital base.
LUV
1.92%
Airlines, Airports & Air Services Industry
- Max
- 17.34%
- Q3
- 13.78%
- Median
- 4.53%
- Q1
- 1.05%
- Min
- -13.54%
LUV’s Return on Invested Capital of 1.92% is in line with the norm for the Airlines, Airports & Air Services industry, reflecting a standard level of efficiency in generating profits from its capital base.
Net Profit Margin
AAL
1.26%
Airlines, Airports & Air Services Industry
- Max
- 24.88%
- Q3
- 9.50%
- Median
- 3.91%
- Q1
- -1.02%
- Min
- -10.56%
AAL’s Net Profit Margin of 1.26% is aligned with the median group of its peers in the Airlines, Airports & Air Services industry. This indicates its ability to convert revenue into profit is typical for the sector.
LUV
1.98%
Airlines, Airports & Air Services Industry
- Max
- 24.88%
- Q3
- 9.50%
- Median
- 3.91%
- Q1
- -1.02%
- Min
- -10.56%
LUV’s Net Profit Margin of 1.98% is aligned with the median group of its peers in the Airlines, Airports & Air Services industry. This indicates its ability to convert revenue into profit is typical for the sector.
Operating Profit Margin
AAL
4.31%
Airlines, Airports & Air Services Industry
- Max
- 22.38%
- Q3
- 14.22%
- Median
- 9.66%
- Q1
- -0.09%
- Min
- -12.58%
AAL’s Operating Profit Margin of 4.31% is around the midpoint for the Airlines, Airports & Air Services industry, indicating that its efficiency in managing core business operations is typical for the sector.
LUV
1.99%
Airlines, Airports & Air Services Industry
- Max
- 22.38%
- Q3
- 14.22%
- Median
- 9.66%
- Q1
- -0.09%
- Min
- -12.58%
LUV’s Operating Profit Margin of 1.99% is around the midpoint for the Airlines, Airports & Air Services industry, indicating that its efficiency in managing core business operations is typical for the sector.
Profitability at a Glance
| Symbol | AAL | LUV |
|---|---|---|
| Return on Equity (TTM) | -15.15% | 5.38% |
| Return on Assets (TTM) | 1.09% | 1.64% |
| Return on Invested Capital (TTM) | 4.12% | 1.92% |
| Net Profit Margin (TTM) | 1.26% | 1.98% |
| Operating Profit Margin (TTM) | 4.31% | 1.99% |
| Gross Profit Margin (TTM) | 23.28% | 18.43% |
Financial Strength
Current Ratio
AAL
0.52
Airlines, Airports & Air Services Industry
- Max
- 1.77
- Q3
- 1.68
- Median
- 0.77
- Q1
- 0.62
- Min
- 0.32
AAL’s Current Ratio of 0.52 falls into the lower quartile for the Airlines, Airports & Air Services industry. This indicates a tighter liquidity situation and a more constrained capacity to handle short-term debt than many of its competitors.
LUV
0.77
Airlines, Airports & Air Services Industry
- Max
- 1.77
- Q3
- 1.68
- Median
- 0.77
- Q1
- 0.62
- Min
- 0.32
LUV’s Current Ratio of 0.77 aligns with the median group of the Airlines, Airports & Air Services industry, indicating that its short-term liquidity is in line with its sector peers.
Debt-to-Equity Ratio
AAL
-8.12
Airlines, Airports & Air Services Industry
- Max
- 3.85
- Q3
- 2.92
- Median
- 1.02
- Q1
- 0.43
- Min
- 0.04
AAL has a Debt-to-Equity Ratio of -8.12, which indicates negative shareholder equity where liabilities exceed assets. This is a critical sign of financial distress.
LUV
0.85
Airlines, Airports & Air Services Industry
- Max
- 3.85
- Q3
- 2.92
- Median
- 1.02
- Q1
- 0.43
- Min
- 0.04
LUV’s Debt-to-Equity Ratio of 0.85 is typical for the Airlines, Airports & Air Services industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
Interest Coverage Ratio
AAL
1.25
Airlines, Airports & Air Services Industry
- Max
- 8.60
- Q3
- 6.00
- Median
- 4.19
- Q1
- 1.03
- Min
- -1.40
AAL’s Interest Coverage Ratio of 1.25 is positioned comfortably within the norm for the Airlines, Airports & Air Services industry, indicating a standard and healthy capacity to cover its interest payments.
LUV
2.88
Airlines, Airports & Air Services Industry
- Max
- 8.60
- Q3
- 6.00
- Median
- 4.19
- Q1
- 1.03
- Min
- -1.40
LUV’s Interest Coverage Ratio of 2.88 is positioned comfortably within the norm for the Airlines, Airports & Air Services industry, indicating a standard and healthy capacity to cover its interest payments.
Financial Strength at a Glance
| Symbol | AAL | LUV |
|---|---|---|
| Current Ratio (TTM) | 0.52 | 0.77 |
| Quick Ratio (TTM) | 0.42 | 0.72 |
| Debt-to-Equity Ratio (TTM) | -8.12 | 0.85 |
| Debt-to-Asset Ratio (TTM) | 0.58 | 0.24 |
| Net Debt-to-EBITDA Ratio (TTM) | 8.51 | -0.05 |
| Interest Coverage Ratio (TTM) | 1.25 | 2.88 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for AAL and LUV. These metrics are based on the companies’ annual financial reports.
Revenue Growth
Earnings Per Share (EPS) Growth
Free Cash Flow Growth
Dividend
Dividend Yield
AAL
0.00%
Airlines, Airports & Air Services Industry
- Max
- 162.17%
- Q3
- 2.10%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
AAL currently does not pay a dividend, resulting in a yield of 0%. This is a common strategy for growth-focused companies that prioritize reinvesting earnings, though it may be less typical in mature, income-oriented sectors.
LUV
2.11%
Airlines, Airports & Air Services Industry
- Max
- 162.17%
- Q3
- 2.10%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
With a Dividend Yield of 2.11%, LUV offers a more attractive income stream than most of its peers in the Airlines, Airports & Air Services industry, signaling a strong commitment to shareholder returns.
Dividend Payout Ratio
AAL
0.00%
Airlines, Airports & Air Services Industry
- Max
- 106.87%
- Q3
- 15.62%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
AAL has a Dividend Payout Ratio of 0%, indicating it does not currently pay a dividend. This is a common strategy for growth-oriented companies that reinvest all profits back into the business.
LUV
58.97%
Airlines, Airports & Air Services Industry
- Max
- 106.87%
- Q3
- 15.62%
- Median
- 0.00%
- Q1
- 0.00%
- Min
- 0.00%
LUV’s Dividend Payout Ratio of 58.97% is in the upper quartile for the Airlines, Airports & Air Services industry. This indicates a strong commitment to shareholder returns but also suggests that a smaller portion of earnings is retained for reinvestment compared to many peers.
Dividend at a Glance
| Symbol | AAL | LUV |
|---|---|---|
| Dividend Yield (TTM) | 0.00% | 2.11% |
| Dividend Payout Ratio (TTM) | 0.00% | 58.97% |
Valuation
Price-to-Earnings Ratio
AAL
11.24
Airlines, Airports & Air Services Industry
- Max
- 24.07
- Q3
- 18.40
- Median
- 12.44
- Q1
- 11.24
- Min
- 7.21
AAL’s P/E Ratio of 11.24 is within the middle range for the Airlines, Airports & Air Services industry. This suggests its valuation is in line with the sector average, representing neither a significant premium nor a discount compared to its peers.
LUV
36.45
Airlines, Airports & Air Services Industry
- Max
- 24.07
- Q3
- 18.40
- Median
- 12.44
- Q1
- 11.24
- Min
- 7.21
At 36.45, LUV’s P/E Ratio is exceptionally high, exceeding the typical maximum for the Airlines, Airports & Air Services industry. This suggests the stock may be significantly overvalued compared to its peers and implies high market expectations that could be difficult to meet.
Forward P/E to Growth Ratio
AAL
0.21
Airlines, Airports & Air Services Industry
- Max
- 1.38
- Q3
- 1.07
- Median
- 0.61
- Q1
- 0.32
- Min
- 0.03
The Forward PEG Ratio is often not a primary valuation metric in the Airlines, Airports & Air Services industry.
LUV
0.97
Airlines, Airports & Air Services Industry
- Max
- 1.38
- Q3
- 1.07
- Median
- 0.61
- Q1
- 0.32
- Min
- 0.03
The Forward PEG Ratio is often not a primary valuation metric in the Airlines, Airports & Air Services industry.
Price-to-Sales Ratio
AAL
0.14
Airlines, Airports & Air Services Industry
- Max
- 1.84
- Q3
- 1.69
- Median
- 0.98
- Q1
- 0.45
- Min
- 0.14
In the lower quartile for the Airlines, Airports & Air Services industry, AAL’s P/S Ratio of 0.14 indicates its revenue is valued more conservatively than most of its peers. This could present a compelling opportunity if the market has overlooked its sales-generating capabilities.
LUV
0.70
Airlines, Airports & Air Services Industry
- Max
- 1.84
- Q3
- 1.69
- Median
- 0.98
- Q1
- 0.45
- Min
- 0.14
LUV’s P/S Ratio of 0.70 aligns with the market consensus for the Airlines, Airports & Air Services industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
Price-to-Book Ratio
AAL
-1.71
Airlines, Airports & Air Services Industry
- Max
- 12.86
- Q3
- 8.15
- Median
- 2.07
- Q1
- 1.50
- Min
- 0.62
AAL has a negative P/B Ratio of -1.71, indicating its liabilities exceed its assets and result in negative shareholder equity. This is a critical warning sign of financial distress.
LUV
2.13
Airlines, Airports & Air Services Industry
- Max
- 12.86
- Q3
- 8.15
- Median
- 2.07
- Q1
- 1.50
- Min
- 0.62
LUV’s P/B Ratio of 2.13 is within the conventional range for the Airlines, Airports & Air Services industry. This shows a balanced market view, where the stock’s price is neither at a significant premium nor a discount to the book value of its peers.
Valuation at a Glance
| Symbol | AAL | LUV |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 11.24 | 36.45 |
| Forward PEG Ratio (TTM) | 0.21 | 0.97 |
| Price-to-Sales Ratio (P/S, TTM) | 0.14 | 0.70 |
| Price-to-Book Ratio (P/B, TTM) | -1.71 | 2.13 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | 2.19 | -34.50 |
| EV-to-EBITDA (TTM) | 10.34 | 7.49 |
| EV-to-Sales (TTM) | 0.80 | 0.70 |