5 Airline Stocks That Are Ready to Take Off
At Zacks, we want our customers to profit from certain stocks and industries that are currently surging. The transportation sector, specifically the airline industry, has been soaring high recently. We believe that the profitability of this industry could continue to increase in the near future.
The airline industry currently ranks in the top 22% on the Zacks Industry Rank. Overall, this industry has returned more than 14% on the year, which outpaces the S&P 500 and puts it among the top performers on Wall Street so far.
Basically, the airline industry is one of the stronger sectors on today’s market and possesses strong value, as well as growth potential for shareholders.
Check out these 5 buy-ranked airline stocks today:
1. Southwest Airlines Company LUV
Over the past six months, LUV has appreciated 19.70% compared to the industry’s gain of 14.34%. This has helped Southwest Airlines receive an “A” grade for Momentum in our Style Scores system, which means the stock could be a good pick for momentum-focused investors looking for shares that are moving higher. Additionally, stock has an “A” grade for Growth, which means sales and profits should be on the rise. Also, Southwest Airlines makes an effort to enhance shareholders’ wealth in a variety of ways. In the first quarter of 2017, the company returned $673 million to shareholders through a combination of dividends and share buybacks. Southwest Airlines currently has a Zacks Rank #2 (Buy).
2. Air France-KLM SA AFLYY
First of all, Air France’s beta rating is 0.55, which means the investment could be much less volatile than a typical security. However, the stock received an “A” Style Score for Value and “B” for Momentum. This means that the stock possesses strong value-based metrics and is expected to continue growing in the future. Air France features a RoE of 83.30% compared to an industry average of 16.49%, and, in the past 60 days, its full-year EPS estimates have increased by 24.49% to $1.83. Air France currently sports a Zacks Rank #1 (Strong Buy).
3. United Continental Holdings Inc. UAL
In the first quarter of 2017, United Continental bought back $313 billion of its common stock and topped their earnings projection for the fourth straight quarter. This type of commitment to shareholder value is important. Not to mention, the stock sports an “A” grade for Value, which indicates that some of its key value-based metrics are strong. Furthermore, over the past 12 weeks, the stock price has increased by 15.01%, and that’s on top of an 81.18% return over the past year. We expect the stock to continue rewarding its shareholders and expanding its profitability in the future. United Continental holds a Zacks Rank #2 (Buy).
4. International Consolidated Airlines Group SA ICAGY
International Consolidated Airlines Group is the main holding company for British Airways and Iberia. The company scored an “A” grade for Value, partly because of its strong 1.69% dividend, but also because of the overall strength we’ve seen in its valuation metrics. The stock currently boasts a net margin of 8.44% and a P/E ratio of 7.45, both of which compare favorably to the rest of the industry. As of 60 days ago, the stock’s full-year EPS estimates increased by 26.25%. The stock’s EPS has grown at a rate of 69.38% over the past 3-5 years, and we expect its growth to continue. International Consolidated Airlines Group is currently a Zacks Rank #1 (Strong Buy).
5. Deutsche Lufthansa AG DLAKY
Deutsche Lufthansa holds a beta rating of 0.57, which means it could be an investment that poses less volatility. However, this company pays a large dividend of 1.90% and sports a strong EV/EBITDA ratio of 2.46. In the past 4 weeks, the stock’s price has increased by 13.67%, while in the past 60 days, full-year EPS estimates have increased by 49.48% to $2.87. This stock is expected to continue increasing its earnings while supporting its “A” grade for Value in our Style Scores system. Deutsche Lufthansa is now a Zacks Rank #1 (Strong Buy).
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