Alaska Air Group, Inc. (ALK) vs Southwest Airlines Co. (LUV)

Alaska Air Group, Inc. and Southwest Airlines Co. are both Airlines companies. Southwest Airlines Co. is the larger, with a market value of $20.5B against $4.5B — 4.6× the size. Alaska Air Group, Inc. has negative trailing earnings, so its P/E is not meaningful; Southwest Airlines Co. trades at 25.7×. Alaska Air Group, Inc. grew revenue faster over the last twelve months: 9.79% against 9.46%. Southwest Airlines Co. has the higher net margin (2.79% vs −1.19%) and the higher return on invested capital (7.04% vs −1.94%). Both pay a dividend; Southwest Airlines Co. yields more (2.28% vs 0.37%). Across the 20 metrics below, Southwest Airlines Co. leads on 13 and Alaska Air Group, Inc. on 7.

Valuation

Metric ALK LUV Airlines median
P/E n/m 25.71 10.32
P/S 0.31 0.69 0.57
P/B 1.24 2.95 2.06
Price to free cash flow n/m n/m 13.20
EV/EBITDA 13.73 8.84 9.68
EV/Sales 0.55 0.77 0.89
Earnings yield (3.81%) 3.89% 2.85%
Free cash flow yield (12.05%) (0.03%) 3.17%

Profitability

Metric ALK LUV Airlines median
Gross margin 100.00% 23.23% 42.57%
Operating margin (1.52%) 3.46% 4.18%
Net margin (1.19%) 2.79% 1.85%
Free cash flow margin (3.71%) (0.02%) 4.31%
Return on equity (4.60%) 11.11% 10.75%
Return on assets (0.85%) 2.85% 1.67%
Return on invested capital (1.94%) 7.04% 3.19%

Growth

Metric ALK LUV Airlines median
Revenue growth (TTM) 9.79% 9.46% 9.79%
EPS growth (last fiscal year) (73.05%) 3.95% —
Revenue growth, 5-year CAGR 31.90% 25.41% 25.83%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric ALK LUV Airlines median
Debt to equity 1.70 0.84 0.81
Current ratio 0.55 0.49 0.60
Net debt to EBITDA 3.10 0.84 1.42

Dividend

Metric ALK LUV Airlines median
Dividend yield 0.37% 2.28% 0.82%
Payout ratio 0.00 0.57 0.00

Size

Metric ALK LUV Airlines median
Market cap 4.50b 20.53b 3.91b

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