AER vs. LUV: A Head-to-Head Stock Comparison
Updated onHere’s a clear look at AER and LUV, comparing key factors like historical performance, profitability, financial strength, growth, dividend, and valuation.
Company Overview
AER’s market capitalization stands at 20.46 billion USD, while LUV’s is 19.42 billion USD, indicating their market valuations are broadly comparable.
With betas of 1.40 for AER and 1.23 for LUV, both stocks show similar sensitivity to overall market movements.
| Symbol | AER | LUV |
|---|---|---|
| Company Name | AerCap Holdings N.V. | Southwest Airlines Co. |
| Country | IE | US |
| Sector | Industrials | Industrials |
| Industry | Rental & Leasing Services | Airlines, Airports & Air Services |
| CEO | Aengus Kelly | Robert E. Jordan |
| Price | 115.89 USD | 34.08 USD |
| Market Cap | 20.46 billion USD | 19.42 billion USD |
| Beta | 1.40 | 1.23 |
| Exchange | NYSE | NYSE |
| IPO Date | November 21, 2006 | January 2, 1980 |
| ADR | No | No |
Historical Performance
This chart compares the performance of AER 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
AER
12.55%
Rental & Leasing Services Industry
- Max
- 33.37%
- Q3
- 21.32%
- Median
- 10.48%
- Q1
- 2.04%
- Min
- -2.71%
AER’s Return on Equity of 12.55% is on par with the norm for the Rental & Leasing Services industry, indicating its profitability relative to shareholder equity is typical for the sector.
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
AER
3.17%
Rental & Leasing Services Industry
- Max
- 19.57%
- Q3
- 13.92%
- Median
- 5.28%
- Q1
- 3.34%
- Min
- -10.86%
AER’s Return on Invested Capital of 3.17% is in the lower quartile for the Rental & Leasing Services industry. This indicates a less efficient conversion of invested capital into profit compared to most of its competitors.
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
AER
26.77%
Rental & Leasing Services Industry
- Max
- 26.77%
- Q3
- 17.31%
- Median
- 5.12%
- Q1
- -0.51%
- Min
- -19.03%
A Net Profit Margin of 26.77% places AER in the upper quartile for the Rental & Leasing Services industry, signifying strong profitability and more effective cost management than most of its peers.
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
AER
32.92%
Rental & Leasing Services Industry
- Max
- 53.21%
- Q3
- 29.93%
- Median
- 16.64%
- Q1
- 8.88%
- Min
- -12.57%
An Operating Profit Margin of 32.92% places AER in the upper quartile for the Rental & Leasing Services industry. This signals a strong ability to translate revenue into operating profit, outperforming most of its competitors in core business efficiency.
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 | AER | LUV |
|---|---|---|
| Return on Equity (TTM) | 12.55% | 5.38% |
| Return on Assets (TTM) | 2.95% | 1.64% |
| Return on Invested Capital (TTM) | 3.17% | 1.92% |
| Net Profit Margin (TTM) | 26.77% | 1.98% |
| Operating Profit Margin (TTM) | 32.92% | 1.99% |
| Gross Profit Margin (TTM) | 38.97% | 18.43% |
Financial Strength
Current Ratio
AER
3.12
Rental & Leasing Services Industry
- Max
- 7.05
- Q3
- 3.95
- Median
- 1.87
- Q1
- 0.85
- Min
- 0.64
AER’s Current Ratio of 3.12 aligns with the median group of the Rental & Leasing Services industry, indicating that its short-term liquidity is in line with its sector peers.
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
AER
2.69
Rental & Leasing Services Industry
- Max
- 3.95
- Q3
- 3.50
- Median
- 2.49
- Q1
- 0.92
- Min
- 0.00
AER’s Debt-to-Equity Ratio of 2.69 is typical for the Rental & Leasing Services industry, indicating its use of leverage is in line with the sector norm. This suggests a balanced approach to its capital structure.
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
AER
5.50
Rental & Leasing Services Industry
- Max
- 6.53
- Q3
- 5.33
- Median
- 2.35
- Q1
- 1.41
- Min
- -1.09
AER’s Interest Coverage Ratio of 5.50 is in the upper quartile for the Rental & Leasing Services industry, signifying a strong and healthy capacity to meet its interest payments from operating profits.
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 | AER | LUV |
|---|---|---|
| Current Ratio (TTM) | 3.12 | 0.77 |
| Quick Ratio (TTM) | 3.06 | 0.72 |
| Debt-to-Equity Ratio (TTM) | 2.69 | 0.85 |
| Debt-to-Asset Ratio (TTM) | 0.64 | 0.24 |
| Net Debt-to-EBITDA Ratio (TTM) | 8.63 | -0.05 |
| Interest Coverage Ratio (TTM) | 5.50 | 2.88 |
Growth
The following charts compare key year-over-year (YoY) growth metrics for AER 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
AER
0.66%
Rental & Leasing Services Industry
- Max
- 2.29%
- Q3
- 1.60%
- Median
- 0.72%
- Q1
- 0.00%
- Min
- 0.00%
AER’s Dividend Yield of 0.66% is consistent with its peers in the Rental & Leasing Services industry, providing a dividend return that is standard for its sector.
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
AER
6.80%
Rental & Leasing Services Industry
- Max
- 260.58%
- Q3
- 29.91%
- Median
- 17.33%
- Q1
- 6.80%
- Min
- 0.00%
AER’s Dividend Payout Ratio of 6.80% is within the typical range for the Rental & Leasing Services industry, suggesting a balanced approach between shareholder payouts and company reinvestment.
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 | AER | LUV |
|---|---|---|
| Dividend Yield (TTM) | 0.66% | 2.11% |
| Dividend Payout Ratio (TTM) | 6.80% | 58.97% |
Valuation
Price-to-Earnings Ratio
AER
9.85
Rental & Leasing Services Industry
- Max
- 32.56
- Q3
- 29.28
- Median
- 17.35
- Q1
- 9.97
- Min
- 5.76
In the lower quartile for the Rental & Leasing Services industry, AER’s P/E Ratio of 9.85 suggests the stock may be undervalued compared to its peers, potentially presenting an attractive entry point for investors.
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
AER
1.33
Rental & Leasing Services Industry
- Max
- 2.86
- Q3
- 2.33
- Median
- 1.39
- Q1
- 0.91
- Min
- 0.01
The Forward PEG Ratio is often not a primary valuation metric in the Rental & Leasing 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
AER
2.56
Rental & Leasing Services Industry
- Max
- 6.35
- Q3
- 3.16
- Median
- 2.03
- Q1
- 0.60
- Min
- 0.25
AER’s P/S Ratio of 2.56 aligns with the market consensus for the Rental & Leasing Services industry. This suggests its valuation, based on sales, is seen as standard and is on par with its competitors.
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
AER
1.22
Rental & Leasing Services Industry
- Max
- 2.76
- Q3
- 2.65
- Median
- 2.02
- Q1
- 1.37
- Min
- 0.69
AER’s P/B Ratio of 1.22 is in the lower quartile for the Rental & Leasing Services industry. From a value investing perspective, this is favorable, as it suggests the stock is trading at a discount to its net asset value and may offer a greater margin of safety.
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 | AER | LUV |
|---|---|---|
| Price-to-Earnings Ratio (P/E, TTM) | 9.85 | 36.45 |
| Forward PEG Ratio (TTM) | 1.33 | 0.97 |
| Price-to-Sales Ratio (P/S, TTM) | 2.56 | 0.70 |
| Price-to-Book Ratio (P/B, TTM) | 1.22 | 2.13 |
| Price-to-Free Cash Flow Ratio (P/FCF, TTM) | -9.80 | -34.50 |
| EV-to-EBITDA (TTM) | 12.54 | 7.49 |
| EV-to-Sales (TTM) | 8.22 | 0.70 |