Loading...

Southwest Airlines

NYSE:LUV
Snowflake Description

Average dividend payer with acceptable track record.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
LUV
NYSE
$28B
Market Cap
  1. Home
  2. US
  3. Transportation
Company description

Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets. The last earnings update was 20 days ago. More info.


Add to Portfolio Compare Print
LUV Share Price and Events
7 Day Returns
2.4%
NYSE:LUV
-1.7%
US Airlines
-0.7%
US Market
1 Year Returns
0%
NYSE:LUV
3%
US Airlines
3%
US Market
LUV Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Southwest Airlines (LUV) 2.4% 0.1% -9.4% 0% 23.8% 102.6%
US Airlines -1.7% -2.6% -3% 3% 30.4% 58.1%
US Market -0.7% -2% 2.4% 3% 39.2% 42%
1 Year Return vs Industry and Market
  • LUV underperformed the Airlines industry which returned 3% over the past year.
  • LUV underperformed the Market in United States of America which returned 3% over the past year.
Price Volatility
LUV
Industry
5yr Volatility vs Market

LUV Value

 Is Southwest Airlines undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Southwest Airlines to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Southwest Airlines.

NYSE:LUV Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 18 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 8.7%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NYSE:LUV
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 6%
Airlines Unlevered Beta Simply Wall St/ S&P Global 0.88
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.878 (1 + (1- 21%) (16.59%))
0.995
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (0.995 * 5.96%)
8.66%

Discounted Cash Flow Calculation for NYSE:LUV using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Southwest Airlines is arrived at by discounting future cash flows to their present value using the 2 stage method. We try to start with analysts estimates of free cash flow, however if these are not available we use the most recent financial results. In the 1st stage we continue to grow the free cash flow over a 10 year period, with the growth rate trending towards the perpetual growth rate used in the 2nd stage. The 2nd stage assumes the company grows at a stable rate into perpetuity.

NYSE:LUV DCF 1st Stage: Next 10 year cash flow forecast
Levered FCF (USD, Millions) Source Present Value
Discounted (@ 8.66%)
2019 2,470.97 Analyst x6 2,273.97
2020 2,710.38 Analyst x6 2,295.44
2021 2,875.00 Analyst x1 2,240.74
2022 2,922.91 Est @ 1.67% 2,096.46
2023 2,980.95 Est @ 1.99% 1,967.63
2024 3,046.79 Est @ 2.21% 1,850.76
2025 3,118.86 Est @ 2.37% 1,743.49
2026 3,196.04 Est @ 2.47% 1,644.20
2027 3,277.58 Est @ 2.55% 1,551.72
2028 3,362.96 Est @ 2.6% 1,465.20
Present value of next 10 years cash flows $19,129.60
NYSE:LUV DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2028 × (1 + g) ÷ (Discount Rate – g)
= $3,362.96 × (1 + 2.73%) ÷ (8.66% – 2.73%)
$58,228.10
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
= $58,228.10 ÷ (1 + 8.66%)10
$25,369.36
NYSE:LUV Total Equity Value
Calculation Result
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= $19,129.60 + $25,369.36
$44,498.95
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $44,498.95 / 543.06
$81.94
NYSE:LUV Discount to Share Price
Calculation Result
Value per share (USD) From above. $81.94
Current discount Discount to share price of $52.24
= -1 x ($52.24 - $81.94) / $81.94
36.2%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Southwest Airlines is available for.
Intrinsic value
36%
Share price is $52.24 vs Future cash flow value of $81.94
Current Discount Checks
For Southwest Airlines to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Southwest Airlines's share price is below the future cash flow value, and at a moderate discount (> 20%).
  • Southwest Airlines's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Southwest Airlines's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Southwest Airlines's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NYSE:LUV PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2019-03-31) in USD $4.24
NYSE:LUV Share Price ** NYSE (2019-05-17) in USD $52.24
United States of America Airlines Industry PE Ratio Median Figure of 12 Publicly-Listed Airlines Companies 11.05x
United States of America Market PE Ratio Median Figure of 3,088 Publicly-Listed Companies 17.89x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Southwest Airlines.

NYSE:LUV PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NYSE:LUV Share Price ÷ EPS (both in USD)

= 52.24 ÷ 4.24

12.33x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Southwest Airlines is overvalued based on earnings compared to the US Airlines industry average.
  • Southwest Airlines is good value based on earnings compared to the United States of America market.
Price based on expected Growth
Does Southwest Airlines's expected growth come at a high price?
Raw Data
NYSE:LUV PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 12.33x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 18 Analysts
8%per year
United States of America Airlines Industry PEG Ratio Median Figure of 11 Publicly-Listed Airlines Companies 1.25x
United States of America Market PEG Ratio Median Figure of 2,117 Publicly-Listed Companies 1.56x

*Line of best fit is calculated by linear regression .

NYSE:LUV PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 12.33x ÷ 8%

1.55x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Southwest Airlines is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Southwest Airlines's assets?
Raw Data
NYSE:LUV PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2019-03-31) in USD $18.03
NYSE:LUV Share Price * NYSE (2019-05-17) in USD $52.24
United States of America Airlines Industry PB Ratio Median Figure of 12 Publicly-Listed Airlines Companies 1.85x
United States of America Market PB Ratio Median Figure of 5,195 Publicly-Listed Companies 1.83x
NYSE:LUV PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NYSE:LUV Share Price ÷ Book Value per Share (both in USD)

= 52.24 ÷ 18.03

2.9x

* Primary Listing of Southwest Airlines.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Southwest Airlines is overvalued based on assets compared to the US Airlines industry average.
X
Value checks
We assess Southwest Airlines's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Airlines industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Airlines industry average (and greater than 0)? (1 check)
  5. Southwest Airlines has a total score of 2/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

LUV Future Performance

 How is Southwest Airlines expected to perform in the next 1 to 3 years based on estimates from 18 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
8%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Southwest Airlines expected to grow at an attractive rate?
  • Southwest Airlines's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Southwest Airlines's earnings growth is positive but not above the United States of America market average.
  • Southwest Airlines's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NYSE:LUV Future Growth Rates Data Sources
Data Point Source Value (per year)
NYSE:LUV Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 18 Analysts 8%
NYSE:LUV Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 18 Analysts 5.9%
United States of America Airlines Industry Earnings Growth Rate Market Cap Weighted Average 9.8%
United States of America Airlines Industry Revenue Growth Rate Market Cap Weighted Average 5.4%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 13.9%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.3%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NYSE:LUV Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 18 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NYSE:LUV Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2022-12-31 27,345 5,305 3,220 1
2021-12-31 25,975 4,982 2,914 6
2020-12-31 24,788 4,687 2,676 18
2019-12-31 23,110 4,240 2,483 18
NYSE:LUV Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2019-03-31 22,170 4,996 2,389
2018-12-31 21,965 4,893 2,465
2018-09-30 21,519 4,467 3,558
2018-06-30 21,247 4,192 3,471
2018-03-31 21,236 3,306 3,481
2017-12-31 21,146 3,929 3,357
2017-09-30 20,963 4,075 2,132
2017-06-30 20,800 3,935 1,993
2017-03-31 20,453 4,302 2,070
2016-12-31 20,289 4,293 2,183
2016-09-30 20,327 3,908 2,258
2016-06-30 20,333 3,887 2,453

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Southwest Airlines's earnings are expected to grow by 8% yearly, however this is not considered high growth (20% yearly).
  • Southwest Airlines's revenue is expected to grow by 5.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NYSE:LUV Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (1 month ago) See Below
Future Estimates Average of up to 18 Analyst Estimates (S&P Global) See Below

All data from Southwest Airlines Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:LUV Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2022-12-31 8.13 8.13 8.13 1.00
2021-12-31 5.94 6.84 5.45 4.00
2020-12-31 5.18 5.58 5.00 12.00
2019-12-31 4.55 4.73 4.38 12.00
NYSE:LUV Past Financials Data
Date (Data in USD Millions) EPS *
2019-03-31 4.24
2018-12-31 4.30
2018-09-30 6.13
2018-06-30 5.90
2018-03-31 5.86
2017-12-31 5.59
2017-09-30 3.51
2017-06-30 3.25
2017-03-31 3.34
2016-12-31 3.48
2016-09-30 3.56
2016-06-30 3.81

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Southwest Airlines is expected to efficiently use shareholders’ funds in the future (Return on Equity greater than 20%).
X
Future performance checks
We assess Southwest Airlines's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Southwest Airlines has a total score of 2/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

LUV Past Performance

  How has Southwest Airlines performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Southwest Airlines's growth in the last year to its industry (Airlines).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Southwest Airlines has delivered over 20% year on year earnings growth in the past 5 years.
  • Southwest Airlines's 1-year earnings growth is negative, it can't be compared to the 5-year average.
  • Southwest Airlines's 1-year earnings growth is negative, it can't be compared to the US Airlines industry average.
Earnings and Revenue History
Southwest Airlines's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Southwest Airlines Company Filings, last reported 1 month ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NYSE:LUV Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2019-03-31 22,170.00 2,389.00 216.00
2018-12-31 21,965.00 2,465.00 215.00
2018-09-30 21,519.00 3,558.00 228.00
2018-06-30 21,247.00 3,471.00 238.00
2018-03-31 21,236.00 3,481.00 238.00
2017-12-31 21,146.00 3,357.00 238.00
2017-09-30 20,963.00 2,132.00 242.00
2017-06-30 20,800.00 1,993.00 232.00
2017-03-31 20,453.00 2,070.00 232.00
2016-12-31 20,289.00 2,183.00 244.00
2016-09-30 20,327.00 2,258.00 218.00
2016-06-30 20,333.00 2,453.00 218.00
2016-03-31 20,060.00 2,241.00 218.00
2015-12-31 19,648.00 2,181.00 218.00
2015-09-30 19,299.00 1,835.00 207.00
2015-06-30 18,952.00 1,580.00 207.00
2015-03-31 18,853.00 1,437.00 207.00
2014-12-31 18,605.00 1,136.00 207.00
2014-09-30 18,405.00 1,158.00 208.00
2014-06-30 18,150.00 1,088.00 208.00
2014-03-31 17,781.00 847.00 208.00
2013-12-31 17,699.00 754.00 208.00
2013-09-30 17,444.00 620.00 223.00
2013-06-30 17,209.00 377.00 223.00
2013-03-31 17,181.00 382.00 223.00
2012-12-31 17,088.00 421.00 223.00
2012-09-30 17,023.00 495.00 237.00
2012-06-30 17,026.00 339.00 237.00

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Southwest Airlines has efficiently used shareholders’ funds last year (Return on Equity greater than 20%).
  • Southwest Airlines used its assets more efficiently than the US Airlines industry average last year based on Return on Assets.
  • Southwest Airlines's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Southwest Airlines's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Airlines industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Southwest Airlines has a total score of 3/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

LUV Health

 How is Southwest Airlines's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Southwest Airlines's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Southwest Airlines's short term (1 year) commitments are greater than its holdings of cash and other short term assets.
  • Southwest Airlines's long term commitments exceed its cash and other short term assets.
Balance sheet
This treemap shows a more detailed breakdown of Southwest Airlines's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • High level of physical assets or inventory.
  • Debt is covered by short term assets, assets are 1.2x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Southwest Airlines Company Filings, last reported 1 month ago.

NYSE:LUV Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2019-03-31 9,791.00 4,707.00 3,861.00
2018-12-31 9,853.00 3,391.00 3,689.00
2018-09-30 10,153.00 3,468.00 3,820.00
2018-06-30 9,997.00 3,543.00 3,686.00
2018-03-31 9,619.00 3,617.00 3,243.00
2017-12-31 9,641.00 3,690.00 3,273.00
2017-09-30 8,800.00 3,100.00 3,040.00
2017-06-30 8,530.00 3,119.00 3,152.00
2017-03-31 8,204.00 3,096.00 3,482.00
2016-12-31 8,441.00 3,422.00 3,305.00
2016-09-30 8,047.00 3,295.00 3,446.00
2016-06-30 7,821.00 3,354.00 3,415.00
2016-03-31 7,496.00 3,354.00 3,582.00
2015-12-31 7,358.00 3,227.00 3,051.00
2015-09-30 6,968.00 2,722.00 3,096.00
2015-06-30 7,158.00 2,741.00 3,132.00
2015-03-31 6,902.00 2,748.00 3,438.00
2014-12-31 6,775.00 2,753.00 2,988.00
2014-09-30 7,429.00 2,769.00 3,560.00
2014-06-30 7,516.00 2,798.00 3,994.00
2014-03-31 7,190.00 2,855.00 3,498.00
2013-12-31 7,336.00 2,865.00 3,152.00
2013-09-30 7,013.00 2,929.00 3,328.00
2013-06-30 6,781.00 2,983.00 3,393.00
2013-03-31 6,961.00 3,042.00 3,135.00
2012-12-31 6,992.00 3,191.00 2,970.00
2012-09-30 7,002.00 3,358.00 3,235.00
2012-06-30 6,840.00 3,404.00 3,256.00
  • Southwest Airlines's level of debt (48.1%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (39.7% vs 48.1% today).
  • Debt is well covered by operating cash flow (106.1%, greater than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 237.5x coverage).
X
Financial health checks
We assess Southwest Airlines's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Southwest Airlines has a total score of 2/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

LUV Dividends

 What is Southwest Airlines's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
1.38%
Current annual income from Southwest Airlines dividends. Estimated to be 1.5% next year.
If you bought $2,000 of Southwest Airlines shares you are expected to receive $28 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Southwest Airlines's pays a lower dividend yield than the bottom 25% of dividend payers in United States of America (1.44%).
  • Southwest Airlines's dividend is below the markets top 25% of dividend payers in United States of America (3.69%).
Upcoming dividend payment

Purchase Southwest Airlines before the 'Buy Limit' to receive their next dividend payment.

Dividends are usually paid every 3 or 6 months, you can time your share purchase to take advantage of upcoming dividend payments.
Dividend payment calendar
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NYSE:LUV Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 18 Analyst Estimates (S&P Global) See Below
United States of America Airlines Industry Average Dividend Yield Market Cap Weighted Average of 8 Stocks 2%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 2000 Stocks 2.5%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.7%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NYSE:LUV Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2022-12-31 1.25 1.00
2021-12-31 0.94 6.00
2020-12-31 0.77 11.00
2019-12-31 0.68 11.00
NYSE:LUV Past Annualized Dividends Data
Date (Data in $) Dividend per share (annual) Avg. Yield (%)
2019-05-15 0.720 1.377
2019-01-30 0.640 1.201
2018-11-14 0.640 1.267
2018-08-01 0.640 1.101
2018-05-16 0.640 1.222
2018-01-31 0.500 0.891
2017-11-16 0.500 0.805
2017-08-03 0.500 0.911
2017-05-17 0.500 0.832
2017-02-02 0.400 0.720
2016-11-17 0.400 0.804
2016-07-28 0.400 1.033
2016-05-18 0.400 0.982
2016-01-28 0.300 0.714
2015-11-20 0.300 0.697
2015-07-30 0.300 0.743
2015-05-13 0.300 0.846
2015-01-29 0.240 0.553
2014-11-20 0.240 0.581
2014-07-30 0.240 0.731
2014-05-14 0.240 0.891
2014-01-30 0.160 0.696
2013-11-21 0.160 0.824
2013-07-17 0.160 1.084
2013-05-15 0.160 1.173
2013-01-31 0.040 0.318
2012-07-26 0.040 0.422
2012-05-16 0.040 0.447
2012-01-26 0.018 0.210
2011-11-17 0.018 0.213
2011-07-28 0.018 0.214
2011-05-18 0.018 0.161
2011-01-27 0.018 0.149
2010-11-18 0.018 0.138
2010-07-15 0.018 0.146
2010-05-19 0.018 0.152
2010-01-29 0.018 0.141
2009-11-19 0.018 0.168
2009-07-23 0.018 0.203

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Dividends per share have been stable in the past 10 years.
  • Dividends per share have increased over the past 10 years.
Current Payout to shareholders
What portion of Southwest Airlines's earnings are paid to the shareholders as a dividend.
  • Dividends paid are well covered by earnings (6.6x coverage).
Future Payout to shareholders
  • Dividends after 3 years are expected to be well covered by earnings (6.3x coverage).
X
Income/ dividend checks
We assess Southwest Airlines's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Southwest Airlines afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Southwest Airlines has a total score of 4/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

LUV Management

 What is the CEO of Southwest Airlines's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Gary Kelly
COMPENSATION $7,726,455
AGE 63
TENURE AS CEO 14.8 years
CEO Bio

Mr. Gary C. Kelly has been the Chairman and Chief Executive Officer of Southwest Airlines Co., an affiliate of AirTran Airways, Inc. since May 2008 and July 15, 2004 respectively. Mr. Kelly served as an Executive Vice President and Chief Financial Officer of Southwest Airlines Co., from June 2001 to July 2004, Vice President of Finance from 1989 to 2001 and Chief Financial Officer from 1989 to July 2004. He served as the President of Southwest Airlines Co., an affiliate of AirTran Airways, Inc. from July 15, 2008 to January 2017. He served as Principal Accounting Officer of Southwest Airlines Co. He joined Southwest Airlines Co., in 1986 as its Controller. Prior to working at Southwest, he served as an Audit Manager of Arthur Young & Company in Dallas and Controller of Systems Center Inc. He serves as Vice Chairman of Air Transport Association Of America. He served as a Vice Chairman of the Board of Southwest Airlines Co., from July 15, 2004 to May 2008. He has been an Independent Director at Lincoln National Corporation since November 4, 2009, AirTran Holdings Inc. since May 2, 2011 and Southwest Airlines Co. since 2004. He served as a Director of Jefferson-pilot Corp., since May 2005. He is a Member of Advisory Council of Red Mccombs School Of Business. He serves on the University of Texas at Austin Business School Dean's Advisory Council and Accounting Department Advisory Council. He is a Member of Financial Executives Institute and Texas Society for CPA. He has been honored as one of the Best Chief Executive Officers in America, Institutional Investor Magazine; One of the Best CFO's in America, Institutional Investor Magazine; and one of Business Travel News 25 Most Influential Executives 2004. He is a Certified Public Accountant. Mr. Kelly received a BBA in Accounting from the University of Texas at Austin.

CEO Compensation
  • Gary's compensation has been consistent with company performance over the past year.
  • Gary's remuneration is lower than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Southwest Airlines management team in years:

4.3
Average Tenure
57
Average Age
  • The tenure for the Southwest Airlines management team is about average.
Management Team

Gary Kelly

TITLE
Chairman & CEO
COMPENSATION
$8M
AGE
63
TENURE
14.8 yrs

Tom Nealon

TITLE
President
COMPENSATION
$4M
AGE
57
TENURE
2.3 yrs

Tammy Romo

TITLE
Executive VP & CFO
COMPENSATION
$3M
AGE
56
TENURE
6.7 yrs

Mike Van de Ven

TITLE
Chief Operating Officer
COMPENSATION
$4M
AGE
56
TENURE
11 yrs

Bob Jordan

TITLE
Executive Vice President of Corporate Services
COMPENSATION
$3M
AGE
57
TENURE
14.8 yrs

Ray Schuster

TITLE
Managing Director of Accounting & Financial Reporting
TENURE
0.5 yrs

Michael Simmons

TITLE
MD of Technology & Chief Information Security Officer
TENURE
0.3 yrs

Kathleen Wayton

TITLE
Senior VP & Chief Information Officer
AGE
58
TENURE
1.8 yrs

Ryan Martinez

TITLE
Managing Director of Investor Relations
TENURE
1.7 yrs

Mark Shaw

TITLE
Executive VP and Chief Legal & Regulatory Officer
AGE
55
TENURE
6.3 yrs
Board of Directors Tenure

Average tenure and age of the Southwest Airlines board of directors in years:

10.5
Average Tenure
71
Average Age
  • The average tenure for the Southwest Airlines board of directors is over 10 years, this suggests they are a seasoned and experienced board.
Board of Directors

Gary Kelly

TITLE
Chairman & CEO
COMPENSATION
$8M
AGE
63
TENURE
11 yrs

Ron Ricks

TITLE
Vice Chairman
COMPENSATION
$273K
AGE
68
TENURE
3.8 yrs

John Denison

TITLE
Director
COMPENSATION
$282K
AGE
73
TENURE
10.5 yrs

John Montford

TITLE
Director
COMPENSATION
$287K
AGE
74
TENURE
17.3 yrs

William Cunningham

TITLE
Lead Director
COMPENSATION
$300K
AGE
74

David Biegler

TITLE
Director
COMPENSATION
$283K
AGE
72
TENURE
13 yrs

Nancy Loeffler

TITLE
Director
COMPENSATION
$248K
AGE
71
TENURE
16.2 yrs

Doug Brooks

TITLE
Director
COMPENSATION
$248K
AGE
65
TENURE
9.3 yrs

J. Biggins

TITLE
Director
COMPENSATION
$248K
AGE
71
TENURE
7.8 yrs

Tom Gilligan

TITLE
Director
COMPENSATION
$254K
AGE
63
TENURE
3.7 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
13. Dec 18 Sell John Montford Individual 12. Dec 18 12. Dec 18 -980 $51.27 $-50,241
20. Nov 18 Sell John Montford Individual 19. Nov 18 19. Nov 18 -956 $52.35 $-50,042
20. Aug 18 Sell Andrew Watterson Individual 17. Aug 18 17. Aug 18 -6,130 $59.30 $-363,405
08. Aug 18 Sell John Montford Individual 07. Aug 18 07. Aug 18 -430 $58.27 $-25,054
31. Jul 18 Sell Mark Shaw Individual 30. Jul 18 30. Jul 18 -4,910 $58.38 $-286,506
X
Management checks
We assess Southwest Airlines's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Southwest Airlines has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

LUV News

Simply Wall St News

Don't Sell Southwest Airlines Co. (NYSE:LUV) Before You Read This

We'll apply a basic P/E ratio analysis to Southwest Airlines Co.'s (NYSE:LUV), to help you decide if the stock is worth further research. … See our latest analysis for Southwest Airlines How Do I Calculate Southwest Airlines's Price To Earnings Ratio? … The formula for P/E is: Price to Earnings Ratio = Price per Share ÷ Earnings per Share (EPS) Or for Southwest Airlines: P/E of 12.45 = $52.74 ÷ $4.24 (Based on the year to March 2019.) Is A High Price-to-Earnings Ratio Good?

Simply Wall St -

If You Had Bought Southwest Airlines (NYSE:LUV) Shares Five Years Ago You'd Have Made 119%

Long term Southwest Airlines Co. … One flawed but reasonable way to assess how sentiment around a company has changed is to compare the earnings per share (EPS) with the share price. … During five years of share price growth, Southwest Airlines achieved compound earnings per share (EPS) growth of 29% per year.

Simply Wall St -

Here's What Southwest Airlines Co.'s (NYSE:LUV) P/E Is Telling Us

We'll apply a basic P/E ratio analysis to Southwest Airlines Co.'s (NYSE:LUV), to help you decide if the stock is worth further research. … How Do I Calculate Southwest Airlines's Price To Earnings Ratio … Price to Earnings Ratio = Share Price ÷ Earnings per Share (EPS)

Simply Wall St -

Southwest Airlines Co.'s (NYSE:LUV) 1.2% Dividend Yield Looks Pretty Interesting

(NYSE:LUV) be an attractive dividend share to own for the long haul? Investors are often drawn to a company for its dividend.. … On the other hand, investors have been known to buy a stock because of its yield, and then lose money if the company's dividend doesn't live up to expectations.. … Before you buy any stock for its dividend however, you should always remember Warren Buffett's two rules: 1) Don't lose money, and 2) Remember rule #1

Simply Wall St -

Have Insiders Been Selling Southwest Airlines Co. (NYSE:LUV) Shares?

So shareholders might well want to know whether insiders have been buying or selling shares in Southwest Airlines Co. … Southwest Airlines Insider Transactions Over The Last Year. … Insiders in Southwest Airlines didn't buy any shares in the last year

Simply Wall St -

How Many Southwest Airlines Co. (NYSE:LUV) Shares Do Institutions Own?

Southwest Airlines is a pretty big company. … Our analysis of the ownership of the company, below, shows that. … Check out our latest analysis for Southwest Airlines

Simply Wall St -

What Should We Expect From Southwest Airlines Co.'s (NYSE:LUV) Earnings In The Year Ahead?

Based on Southwest Airlines Co.'s (NYSE:LUV) earnings update in December 2018,. … analyst consensus outlook appear cautiously subdued, … with earnings expected to grow by 15% in the upcoming year

Simply Wall St -

Why Southwest Airlines Co.’s (NYSE:LUV) Return On Capital Employed Is Impressive

In particular, we'll consider its Return On Capital Employed (ROCE), as that can give us insight into how profitably the company is able to employ capital in its business. … Understanding Return On Capital Employed (ROCE). … ROCE is a measure of a company's yearly pre-tax profit (its return), relative to the capital employed in the business.

Simply Wall St -

Should You Be Pleased About The CEO Pay At Southwest Airlines Co.'s (NYSE:LUV)

Gary Kelly has been the CEO of Southwest Airlines Co. … This report will, first, examine the CEO compensation levels in comparison to CEO compensation at other big companies. … How Does Gary Kelly's Compensation Compare With Similar Sized Companies?

Simply Wall St -

Is Southwest Airlines Co.'s (NYSE:LUV) Liquidity Good Enough?

(NYSE:LUV), a large-cap worth US$32b, comes to mind for investors seeking a strong and reliable stock investment. … Most investors favour these big stocks due to their strong balance sheet and high market liquidity, meaning there are an abundance of stock in the public market available for trading. … Using the most recent data for LUV, I will determine its financial status based on its solvency and liquidity, and assess whether the stock is a safe investment.

Simply Wall St -

LUV Company Info

Description

Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2018, the company operated a total of 750 Boeing 737 aircraft; and served 99 destinations in 40 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as 10 near-international countries, including Mexico, Jamaica, the Bahamas, Aruba, the Dominican Republic, Costa Rica, Belize, Cuba, the Cayman Islands, and Turks and Caicos. It also offers inflight entertainment and connectivity service on Wi-Fi enabled aircraft; and sells points and related services to business partners participating in the Rapid Rewards loyalty program, such as car rental agencies, hotels, restaurants, and retailers. In addition, the company provides a suite of digital platforms to support customers' needs across the travel journey, including Southwest.com, mobile.southwest.com, an iOS app, and an android app; and Swabiz.com, a Website for business customers that offer businesses shared stored company credit cards, company activity reporting, and centralized traveler management services. Southwest Airlines Co. was founded in 1967 and is based in Dallas, Texas.

Details
Name: Southwest Airlines Co.
LUV
Exchange: NYSE
Founded: 1967
$28,369,709,226
543,064,878
Website: http://www.southwest.com
Address: Southwest Airlines Co.
PO Box 36611,
Dallas,
Texas, 75235,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NYSE LUV Common Stock New York Stock Exchange US USD 24. Oct 1975
DB SWN Common Stock Deutsche Boerse AG DE EUR 24. Oct 1975
LSE 0L8F Common Stock London Stock Exchange GB USD 24. Oct 1975
BMV LUV * Common Stock Bolsa Mexicana de Valores MX MXN 24. Oct 1975
Number of employees
Current staff
Staff numbers
59,436
Southwest Airlines employees.
Industry
Airlines
Transportation
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/05/20 01:41
End of day share price update: 2019/05/17 00:00
Last estimates confirmation: 2019/05/18
Last earnings filing: 2019/04/30
Last earnings reported: 2019/03/31
Last annual earnings reported: 2018/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

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.