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DAL vs. LUV: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Transportation - Airline sector might want to consider either Delta Air Lines (DAL - Free Report) or Southwest Airlines (LUV - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Delta Air Lines is sporting a Zacks Rank of #2 (Buy), while Southwest Airlines has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that DAL likely has seen a stronger improvement to its earnings outlook than LUV has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
DAL currently has a forward P/E ratio of 8.52, while LUV has a forward P/E of 11.20. We also note that DAL has a PEG ratio of 0.68. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LUV currently has a PEG ratio of 1.88.
Another notable valuation metric for DAL is its P/B ratio of 2.88. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LUV has a P/B of 2.98.
Based on these metrics and many more, DAL holds a Value grade of A, while LUV has a Value grade of C.
DAL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that DAL is likely the superior value option right now.
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DAL vs. LUV: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Transportation - Airline sector might want to consider either Delta Air Lines (DAL - Free Report) or Southwest Airlines (LUV - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Delta Air Lines is sporting a Zacks Rank of #2 (Buy), while Southwest Airlines has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that DAL likely has seen a stronger improvement to its earnings outlook than LUV has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
DAL currently has a forward P/E ratio of 8.52, while LUV has a forward P/E of 11.20. We also note that DAL has a PEG ratio of 0.68. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. LUV currently has a PEG ratio of 1.88.
Another notable valuation metric for DAL is its P/B ratio of 2.88. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, LUV has a P/B of 2.98.
Based on these metrics and many more, DAL holds a Value grade of A, while LUV has a Value grade of C.
DAL is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that DAL is likely the superior value option right now.