NYSE:ALK

Stock Analysis Report

Executive Summary

Alaska Air Group, Inc., through its subsidiaries, provides passenger and cargo air transportation services.

Snowflake

Fundamentals

Good value second-rate dividend payer.


Similar Companies

Share Price & News

How has Alaska Air Group's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

1.2%

ALK

1.3%

US Airlines

0.5%

US Market


1 Year Return

6.8%

ALK

-1.2%

US Airlines

6.8%

US Market

Return vs Industry: ALK exceeded the US Airlines industry which returned -1.2% over the past year.

Return vs Market: ALK matched the US Market which returned 6.8% over the past year.


Shareholder returns

ALKIndustryMarket
7 Day1.2%1.3%0.5%
30 Day2.8%-2.6%-0.8%
90 Day6.3%-6.8%-0.9%
1 Year9.1%6.8%0.3%-1.2%9.2%6.8%
3 Year-5.2%-10.4%28.5%23.5%45.6%36.2%
5 Year44.4%33.1%52.6%43.8%63.2%45.4%

Price Volatility Vs. Market

How volatile is Alaska Air Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Alaska Air Group undervalued compared to its fair value and its price relative to the market?

45.0%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ALK ($66.84) is trading below our estimate of fair value ($121.44)

Significantly Below Fair Value: ALK is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ALK is poor value based on its PE Ratio (16.3x) compared to the Airlines industry average (8.7x).

PE vs Market: ALK is good value based on its PE Ratio (16.3x) compared to the US market (17.7x).


Price to Earnings Growth Ratio

PEG Ratio: ALK is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: ALK is overvalued based on its PB Ratio (2.1x) compared to the US Airlines industry average (1.7x).


Next Steps

Future Growth

How is Alaska Air Group forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

17.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ALK's forecast earnings growth (17.1% per year) is above the savings rate (2.7%).

Earnings vs Market: ALK's earnings (17.1% per year) are forecast to grow faster than the US market (14.6% per year).

High Growth Earnings: ALK's earnings are forecast to grow, but not significantly.

Revenue vs Market: ALK's revenue (5.3% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: ALK's revenue (5.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ALK's Return on Equity is forecast to be low in 3 years time (18.1%).


Next Steps

Past Performance

How has Alaska Air Group performed over the past 5 years?

-2.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: ALK's earnings have declined by -2% per year over the past 5 years.

Accelerating Growth: ALK's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ALK had negative earnings growth (-34.4%) over the past year, making it difficult to compare to the Airlines industry average (-30.9%).


Return on Equity

High ROE: ALK's Return on Equity (12.7%) is considered low.


Return on Assets

ROA vs Industry: ALK's Return on Assets is below or equal to the Airlines industry average last year.


Return on Capital Employed

ROCE Improving: ALK's Return on Capital Employed has declined over the past 3 years.


Next Steps

Financial Health

How is Alaska Air Group's financial position?


Financial Position Analysis

Short Term Liabilities: ALK's short term assets ($2.2B) do not cover its short term liabilities ($3.5B)

Long Term Liabilities: ALK's short term assets (2.2B) do not cover its long term liabilities (5.4B)


Debt to Equity History and Analysis

Debt Level: ALK's debt to equity ratio (46%) is considered high

Reducing Debt: ALK's debt to equity ratio has increased from 39.9% to 46% over the past 5 years.

Debt Coverage: ALK's debt is well covered by operating cash flow (82.3%).

Interest Coverage: ALK's interest payments on its debt are well covered by EBIT (31.1x coverage).


Balance Sheet

Inventory Level: ALK has a high level of physical assets or inventory.

Debt Coverage by Assets: ALK's debt is covered by short term assets (assets are 1.214670x debt).


Next Steps

Dividend

What is Alaska Air Group's current dividend yield, its reliability and sustainability?

2.09%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%1.4%markettop25%3.7%industryaverage2.2%forecastin3Years2.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: ALK's dividend (2.09%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: ALK's dividend (2.09%) is low compared to the top 25% of dividend payers in the US market (3.73%).

Stable Dividend: Whilst dividend payments have been stable, ALK has been paying a dividend for less than 10 years.

Growing Dividend: ALK's dividend payments have increased, but the company has only paid a dividend for 6 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32.7%), ALK's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: ALK's dividends in 3 years are forecast to be well covered by earnings (19.6% payout ratio).


Next Steps

Management

What is the CEO of Alaska Air Group's salary, the management and board of directors tenure and is there insider trading?

5.5yrs

Average management tenure


CEO

Brad Tilden (58yo)

7.4yrs

Tenure

US$4,374,845

Compensation

Mr. Bradley D. Tilden, also known as Brad, has been the Chief Executive Officer and President at Alaska Air Group, Inc. since May 15, 2012. Mr. Tilden has been the Chief Executive Officer of Alaska Airline ...


CEO Compensation Analysis

Compensation vs. Market: Brad's total compensation ($USD4.37M) is about average for companies of similar size in the US market ($USD6.81M).

Compensation vs Earnings: Brad's compensation has been consistent with company performance over the past year.


Management Age and Tenure

5.5yrs

Average Tenure

52yo

Average Age

Experienced Management: ALK's management team is seasoned and experienced (5.5 years average tenure).


Board Age and Tenure

5.8yrs

Average Tenure

62.5yo

Average Age

Experienced Board: ALK's board of directors are considered experienced (5.8 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

SellUS$294,34820 May 19
Andrew Harrison
EntityIndividual
Role
Other Key Executive
Executive VP & Chief Commercial Officer of Alaska Airlines Inc.
Shares4,700
Max PriceUS$62.63
SellUS$98,44214 May 19
Andrew Harrison
EntityIndividual
Role
Other Key Executive
Executive VP & Chief Commercial Officer of Alaska Airlines Inc.
Shares1,600
Max PriceUS$61.53
SellUS$251,73622 Feb 19
Andrew Harrison
EntityIndividual
Role
Other Key Executive
Executive VP & Chief Commercial Officer of Alaska Airlines Inc.
Shares4,000
Max PriceUS$62.93
SellUS$50,35715 Feb 19
Christopher Berry
EntityIndividual
Shares750
Max PriceUS$67.14
SellUS$182,80104 Dec 18
James Thompson
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,500
Max PriceUS$73.12
SellUS$58,17130 Oct 18
Andrew Harrison
EntityIndividual
Role
Other Key Executive
Executive VP & Chief Commercial Officer of Alaska Airlines Inc.
Shares930
Max PriceUS$62.55

Ownership Breakdown


Management Team

  • Brad Tilden (58yo)

    Chairman

    • Tenure: 7.4yrs
    • Compensation: US$4.37m
  • Andrew Harrison (48yo)

    Executive VP & Chief Commercial Officer of Alaska Airlines Inc.

    • Tenure: 4.7yrs
    • Compensation: US$2.33m
  • Brandon Pedersen (52yo)

    CFO, Executive VP of Finance & Treasurer

    • Tenure: 9.3yrs
    • Compensation: US$2.32m
  • Ben Minicucci (52yo)

    President & COO of Alaska Airlines Inc and CEO of Virgin America Inc

    • Tenure: 0yrs
    • Compensation: US$3.07m
  • Helvi Sandvik (61yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$193.91k
  • Kyle Levine (47yo)

    Chief Ethics & Compliance Officer

    • Tenure: 3.8yrs
  • Kevin Thiel

    Managing Director of Accounting Operations

    • Tenure: 5.7yrs
  • Lavanya Sareen

    Managing Director of Investor Relations

    • Tenure: 5.3yrs
  • Shane Tackett (40yo)

    Executive VP of Planning & Strategy of Alaska Airlines

    • Tenure: 0yrs
    • Compensation: US$1.50m
  • Geni Venable

    Manager of Corporate Communication

    • Tenure: 0yrs

Board Members

  • Phyllis Campbell (67yo)

    Independent Director

    • Tenure: 17.8yrs
    • Compensation: US$205.71k
  • Brad Tilden (58yo)

    Chairman

    • Tenure: 7.4yrs
    • Compensation: US$4.37m
  • Ken Thompson (67yo)

    Independent Director

    • Tenure: 20.8yrs
    • Compensation: US$190.47k
  • Eric Yeaman (51yo)

    Independent Director

    • Tenure: 6.9yrs
    • Compensation: US$214.27k
  • James Beer (58yo)

    Independent Director

    • Tenure: 2.2yrs
    • Compensation: US$187.34k
  • Patty Bedient (65yo)

    Lead Independent Director

    • Tenure: 3.4yrs
    • Compensation: US$204.97k
  • Marion Blakey (70yo)

    Independent Director

    • Tenure: 9yrs
    • Compensation: US$204.13k
  • Ray Conner (64yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$227.09k
  • Dhiren Fonseca (54yo)

    Independent Director

    • Tenure: 5yrs
    • Compensation: US$197.70k
  • Helvi Sandvik (61yo)

    Independent Director

    • Tenure: 5.9yrs
    • Compensation: US$193.91k

Company Information

Alaska Air Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Alaska Air Group, Inc.
  • Ticker: ALK
  • Exchange: NYSE
  • Founded: 1932
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: US$8.240b
  • Shares outstanding: 123.27m
  • Website: https://www.alaskaair.com

Number of Employees


Location

  • Alaska Air Group, Inc.
  • 19300 International Boulevard
  • Seattle
  • Washington
  • 98188
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ALKNYSE (New York Stock Exchange)YesCommon StockUSUSDJan 1968
ALKDB (Deutsche Boerse AG)YesCommon StockDEEURJan 1968
0HC3LSE (London Stock Exchange)YesCommon StockGBUSDJan 1968

Biography

Alaska Air Group, Inc., through its subsidiaries, provides passenger and cargo air transportation services. The company operates through three segments: Mainline, Regional, and Horizon. It has a network of ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 23:31
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.