Southwest Airlines Co. (LUV) vs China Southern Airlines Company Limited (ZNH)

Southwest Airlines Co. and China Southern Airlines Company Limited are both Airlines companies. Southwest Airlines Co. is the larger, with a market value of $20.5B against $17.7B — 1.2× the size. China Southern Airlines Company Limited has negative trailing earnings, so its P/E is not meaningful; Southwest Airlines Co. trades at 25.7×. Southwest Airlines Co. grew revenue faster over the last twelve months: 9.46% against −2.66%. Southwest Airlines Co. has the higher net margin (2.79% vs −9.08%) and the higher return on invested capital (7.04% vs 0.00%). Across the 19 metrics below, Southwest Airlines Co. leads on 15 and China Southern Airlines Company Limited on 4.

Valuation

Metric LUV ZNH Airlines median
P/E 25.71 n/m 10.32
P/S 0.69 0.55 0.57
P/B 2.95 1.28 2.06
Price to free cash flow n/m n/m 13.20
EV/EBITDA 8.84 199.92 9.68
EV/Sales 0.77 1.02 0.89
Earnings yield 3.89% (11.51%) 2.85%
Free cash flow yield (0.03%) (8.02%) 3.17%

Profitability

Metric LUV ZNH Airlines median
Gross margin 23.23% (0.11%) 42.57%
Operating margin 3.46% (7.90%) 4.18%
Net margin 2.79% (9.08%) 1.85%
Free cash flow margin (0.02%) 0.00% 4.31%
Return on equity 11.11% 0.00% 10.75%
Return on assets 2.85% 0.00% 1.67%
Return on invested capital 7.04% 0.00% 3.19%

Growth

Metric LUV ZNH Airlines median
Revenue growth (TTM) 9.46% (2.66%) 9.79%
EPS growth (last fiscal year) 3.95% 57.67% —
Revenue growth, 5-year CAGR 25.41% 1.65% 25.83%
Net income growth, 5-year CAGR 0.00% 0.00% 0.00%

Health

Metric LUV ZNH Airlines median
Debt to equity 0.84 2.82 0.81
Current ratio 0.49 0.23 0.60
Net debt to EBITDA 0.84 22.72 1.42

Dividend

Metric LUV ZNH Airlines median
Dividend yield 2.28% — 0.82%
Payout ratio 0.57 0.00 0.00

Size

Metric LUV ZNH Airlines median
Market cap 20.53b 17.69b 3.91b

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