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Here's Why Investors Should Hold Air Lease (AL) Stock Now

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Air Lease Corporation (AL - Free Report) is benefiting from shareholder-friendly measures, and strong freight and cargo market.

Factors Favoring AL

We are impressed by Air Lease’s endeavors to reward its shareholders. The company has an impressive dividend payment history. On Nov 3, 2023, AL’s board of directors hiked its quarterly cash dividend by 5% to 21 cents per share. Previously it paid dividend of 20 cents.

The raised quarterly dividend will be paid on Jan 10, 2024, to holders of record as of Dec 15, 2023. Such shareholder-friendly moves instill investors’ confidence and positively impact the company's bottom line.

Strong freight and cargo markets are supporting demand for the company’s wide-body passenger aircraft. Continued recovery in airline operations is further driving lease demand. Higher lease demand, coupled with increasing interest rates and inflation, indicates a rising lease rate environment, which bodes well for Air Lease.

Key Risks

Air Lease’s liquidity position is a concern. Cash and cash equivalent of $512.08 million at the end of the third quarter of 2023 was lower than $18.6 billion of debt financing, and net of discount and issuance costs. This implies that the company does not have enough cash to meet its debt burden.

Zacks Rank

AL currently carries Zacks Rank #3 (Hold).

Key Picks

Some better-ranked stocks for investors interested in the Zacks Transportation sector are Air Canada (ACDVF - Free Report) and SkyWest (SKYW - Free Report) .

Air Canada currently sports a Zacks Rank #1 (Strong Buy). An uptick in passenger traffic is aiding ACDVF. Recently, management announced plans to launch a new year-round route between Montreal and Madrid.  You can see the complete list of today’s Zacks #1 Rank stocks here.

The service will commence in May of the following year as part of its expanded international summer 2024 flying schedule to cater to increased demand.  

SkyWest currently carries a Zacks Rank #2 (Buy). SKYW's fleet-modernization efforts are commendable. Initiatives to reward its shareholders also bode well. The Zacks Consensus Estimate for current-quarter earnings has surged 83.3% in the past 60 days.

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