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Multiple Tailwinds Aid Delta (DAL): Retain Stock for Now
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Delta Air Lines, Inc. (DAL - Free Report) has been in news of late surrounded by several positive developments.
The company recently reported impressive traffic numbers for July. Load factor or percentage of seats filled by passengers, a key measure of airline efficiency, increased 50 basis points to 88.6% as traffic growth (4%) exceeded capacity expansion (3.5%). A high load factor as well as a year-over-year improvement in the metric is always desirable for the airline companies as it ensures efficient capacity utilization, leading to profitability.
Last month, the carrier reported encouraging earnings numbers for the second quarter of 2018. It delivered better-than-expected earnings as well as revenues. The bottom line also improved on a year-over-year basis despite high fuel costs. The top line too rose more than 9% from the year-ago figure on 8% higher passenger revenues.
Simultaneously, the company’s board cleared a dividend hike of 15% to 35 cents per share ($1.40 annually) for the third quarter.
Apart from these, a noteworthy development took place this April when Berkshire Hathaway, a company run by the billionaire investor Warren Buffett, raised its stake in Delta. Given Buffett’s skill in making wise investment decisions, this is a visible sign that Delta holds good prospects for the future.
The company’s expectation for third-quarter unit revenues further highlights the bullish sentiment pertaining to its overall growth. Delta anticipates third-quarter total unit revenues excluding refinery sales to increase in the 3.5-5.5% band.
Owing to these tailwinds, shares of the company have gained 4% in the past three months versus the industry’s 4.9% decline.
In view of the above upsides, we suggest investors to hold onto Delta for now. The company also has a commendable VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.
Shares of SkyWest, GATX and Trinity have rallied more than 76%, 34% and 28%, respectively, in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
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Multiple Tailwinds Aid Delta (DAL): Retain Stock for Now
Delta Air Lines, Inc. (DAL - Free Report) has been in news of late surrounded by several positive developments.
The company recently reported impressive traffic numbers for July. Load factor or percentage of seats filled by passengers, a key measure of airline efficiency, increased 50 basis points to 88.6% as traffic growth (4%) exceeded capacity expansion (3.5%). A high load factor as well as a year-over-year improvement in the metric is always desirable for the airline companies as it ensures efficient capacity utilization, leading to profitability.
Last month, the carrier reported encouraging earnings numbers for the second quarter of 2018. It delivered better-than-expected earnings as well as revenues. The bottom line also improved on a year-over-year basis despite high fuel costs. The top line too rose more than 9% from the year-ago figure on 8% higher passenger revenues.
Simultaneously, the company’s board cleared a dividend hike of 15% to 35 cents per share ($1.40 annually) for the third quarter.
Apart from these, a noteworthy development took place this April when Berkshire Hathaway, a company run by the billionaire investor Warren Buffett, raised its stake in Delta. Given Buffett’s skill in making wise investment decisions, this is a visible sign that Delta holds good prospects for the future.
The company’s expectation for third-quarter unit revenues further highlights the bullish sentiment pertaining to its overall growth. Delta anticipates third-quarter total unit revenues excluding refinery sales to increase in the 3.5-5.5% band.
Owing to these tailwinds, shares of the company have gained 4% in the past three months versus the industry’s 4.9% decline.
In view of the above upsides, we suggest investors to hold onto Delta for now. The company also has a commendable VGM Score of A. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.
Zacks Rank & Key Picks
Delta carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are SkyWest, Inc. (SKYW - Free Report) , GATX Corporation (GATX - Free Report) and Trinity Industries, Inc. (TRN - Free Report) . While SkyWest and Trinity sport a Zacks Rank #1 (Strong Buy), GATX carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of SkyWest, GATX and Trinity have rallied more than 76%, 34% and 28%, respectively, in a year.
Today's Stocks from Zacks' Hottest Strategies
It's hard to believe, even for us at Zacks. But while the market gained +21.9% in 2017, our top stock-picking screens have returned +115.0%, +109.3%, +104.9%, +98.6%, and +67.1%.
And this outperformance has not just been a recent phenomenon. Over the years it has been remarkably consistent. From 2000 - 2017, the composite yearly average gain for these strategies has beaten the market more than 19X over. Maybe even more remarkable is the fact that we're willing to share their latest stocks with you without cost or obligation.
See Them Free>>