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Should You Consider Southwest Airlines Co. (NYSE:LUV)?

Simply Wall St

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I've been keeping an eye on Southwest Airlines Co. (NYSE:LUV) because I'm attracted to its fundamentals. Looking at the company as a whole, as a potential stock investment, I believe LUV has a lot to offer. Basically, it is a dependable dividend-paying company that has been able to sustain great financial health over the past. In the following section, I expand a bit more on these key aspects. For those interested in understanding where the figures come from and want to see the analysis, read the full report on Southwest Airlines here.

Adequate balance sheet average dividend payer

LUV’s debt-to-equity ratio stands at 33%, which means its debt level is reasonable. This implies that LUV has a healthy balance between taking advantage of low cost debt funding as well as sufficient financial flexibility without succumbing to the strict terms of debt. LUV appears to have made good use of debt, producing operating cash levels of 1.56x total debt in the prior year. This is a strong indication that debt is reasonably met with cash generated.

NYSE:LUV Historical Debt, July 18th 2019

Income investors would also be happy to know that LUV is a great dividend company, with a current yield standing at 1.4%. LUV has also been regularly increasing its dividend payments to shareholders over the past decade.

NYSE:LUV Historical Dividend Yield, July 18th 2019

Next Steps:

For Southwest Airlines, I've put together three fundamental factors you should look at:

  1. Future Outlook: What are well-informed industry analysts predicting for LUV’s future growth? Take a look at our free research report of analyst consensus for LUV’s outlook.
  2. Historical Performance: What has LUV's returns been like over the past? Go into more detail in the past track record analysis and take a look at the free visual representations of our analysis for more clarity.
  3. Other Attractive Alternatives : Are there other well-rounded stocks you could be holding instead of LUV? Explore our interactive list of stocks with large potential to get an idea of what else is out there you may be missing!

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.