Stock Analysis Report

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Executive Summary

Southwest Airlines Co. operates a passenger airline that provides scheduled air transportation services in the United States and near-international markets.

Snowflake Analysis

High growth potential established dividend payer.

Similar Companies

Share Price & News

How has Southwest Airlines's share price performed over time and what events caused price changes?

Latest Share Price and Events

Stable Share Price: LUV's share price has been volatile over the past 3 months.

Market Performance

7 Day Return




US Airlines


US Market

1 Year Return




US Airlines


US Market

Return vs Industry: LUV exceeded the US Airlines industry which returned -51.9% over the past year.

Return vs Market: LUV underperformed the US Market which returned 7.1% over the past year.

Shareholder returns

7 Day12.7%12.1%2.5%
30 Day5.1%6.4%5.1%
90 Day-29.5%-43.1%2.0%
1 Year-30.6%-31.6%-48.3%-48.9%10.9%8.4%
3 Year-44.2%-46.1%-51.9%-53.6%30.5%21.9%
5 Year-8.1%-12.4%-35.1%-38.7%56.9%39.2%

Price Volatility Vs. Market

How volatile is Southwest Airlines's share price compared to the market and industry in the last 5 years?

Simply Wall St News


Is Southwest Airlines undervalued compared to its fair value and its price relative to the market?


Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: LUV ($32.55) is trading below our estimate of fair value ($52.87)

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

Price To Earnings Ratio

PE vs Industry: LUV is poor value based on its PE Ratio (9.5x) compared to the Airlines industry average (7.8x).

PE vs Market: LUV is good value based on its PE Ratio (9.5x) compared to the US market (15.6x).

Price to Earnings Growth Ratio

PEG Ratio: LUV is good value based on its PEG Ratio (0.1x)

Price to Book Ratio

PB vs Industry: LUV is overvalued based on its PB Ratio (1.8x) compared to the US Airlines industry average (0.8x).

Next Steps

Future Growth

How is Southwest Airlines forecast to perform in the next 1 to 3 years based on estimates from 15 analysts?


Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: LUV's forecast earnings growth (92.3% per year) is above the savings rate (2.2%).

Earnings vs Market: LUV's earnings (92.3% per year) are forecast to grow faster than the US market (21.6% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: LUV's revenue (21.2% per year) is forecast to grow faster than the US market (8.8% per year).

High Growth Revenue: LUV's revenue (21.2% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: LUV's Return on Equity is forecast to be low in 3 years time (7.8%).

Next Steps

Past Performance

How has Southwest Airlines performed over the past 5 years?


Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: LUV has high quality earnings.

Growing Profit Margin: LUV's current net profit margins (8.5%) are lower than last year (10.8%).

Past Earnings Growth Analysis

Earnings Trend: LUV's earnings have grown by 6.7% per year over the past 5 years.

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

Earnings vs Industry: LUV had negative earnings growth (-23.9%) over the past year, making it difficult to compare to the Airlines industry average (-14.4%).

Return on Equity

High ROE: LUV's Return on Equity (20%) is considered high.

Next Steps

Financial Health

How is Southwest Airlines's financial position?

Financial Position Analysis

Short Term Liabilities: LUV's short term assets ($7.0B) do not cover its short term liabilities ($10.2B).

Long Term Liabilities: LUV's short term assets ($7.0B) do not cover its long term liabilities ($7.6B).

Debt to Equity History and Analysis

Debt Level: LUV's debt to equity ratio (56.8%) is considered high.

Reducing Debt: LUV's debt to equity ratio has increased from 39.8% to 56.8% over the past 5 years.

Debt Coverage: LUV's debt is well covered by operating cash flow (48.6%).

Interest Coverage: LUV's interest payments on its debt are well covered by EBIT (101.4x coverage).

Balance Sheet

Next Steps


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


Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: LUV's dividend (2.21%) is higher than the bottom 25% of dividend payers in the US market (1.71%).

High Dividend: LUV's dividend (2.21%) is low compared to the top 25% of dividend payers in the US market (4.54%).

Stability and Growth of Payments

Stable Dividend: LUV's dividends per share have been stable in the past 10 years.

Growing Dividend: LUV's dividend payments have increased over the past 10 years.

Current Payout to Shareholders

Dividend Coverage: With its low payout ratio (20.9%), LUV's dividend payments are well covered by earnings.

Future Payout to Shareholders

Future Dividend Coverage: LUV's dividends in 3 years are forecast to be well covered by earnings (15.9% payout ratio).

Next Steps


How experienced are the management team and are they aligned to shareholders interests?


Average management tenure


Gary Kelly (64yo)





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 Ex ...

CEO Compensation Analysis

Compensation vs Market: Gary's total compensation ($USD8.77M) is about average for companies of similar size in the US market ($USD11.74M).

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

Leadership Team

Gary Kelly
Chairman & CEO15.83yrsUS$8.77m0.12% $22.1m
Thomas Nealon
President3.33yrsUS$3.84m0.018% $3.5m
Tammy Romo
Executive VP & CFO7.67yrsUS$3.19m0.020% $3.8m
Michael Van de Ven
Chief Operating Officer12yrsUS$3.84m0.030% $5.7m
Robert Jordan
Executive Vice President of Corporate Services15.75yrsUS$3.16m0.017% $3.3m
Ray Schuster
Managing Director of Accounting & Financial Reporting1.5yrsno datano data
Thomas Merritt
VP of Technology – Infrastructure & Services and CTO0.67yrno datano data
Kathleen Wayton
Senior VP of Technology & Chief Information Officer2.83yrsno datano data
Ryan Martinez
Managing Director of Investor Relations2.67yrsno datano data
Mark Shaw
Executive VP and Chief Legal & Regulatory Officer7.17yrsno data0.0039% $738.6k


Average Tenure


Average Age

Experienced Management: LUV's management team is seasoned and experienced (5.3 years average tenure).

Board Members

Gary Kelly
Chairman & CEO15.83yrsUS$8.77m0.12% $22.1m
John Denison
Independent Director11.5yrsUS$290.04k0.010% $1.9m
Ron Ricks
Vice Chairman4.83yrsUS$281.54k0.033% $6.4m
David Biegler
Independent Director14yrsUS$290.04k0.0097% $1.9m
Douglas Brooks
Independent Director10.33yrsUS$256.54k0.0098% $1.9m
J. Biggins
Independent Director8.75yrsUS$255.04k0.0082% $1.6m
John Montford
Independent Director18.33yrsUS$293.54k0.0044% $844.1k
William Cunningham
Independent Lead Directorno dataUS$308.54k0.014% $2.7m
Nancy Loeffler
Independent Director17.17yrsUS$255.04k0.0081% $1.5m
Thomas Gilligan
Independent Director4.67yrsUS$262.54k0.0028% $541.0k


Average Tenure


Average Age

Experienced Board: LUV's board of directors are seasoned and experienced ( 11.5 years average tenure).


Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

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

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 8.5%.

Top Shareholders

Company Information

Southwest Airlines Co.'s company bio, employee growth, exchange listings and data sources

Key Information

  • Name: Southwest Airlines Co.
  • Ticker: LUV
  • Exchange: NYSE
  • Founded: 1967
  • Industry: Airlines
  • Sector: Transportation
  • Market Cap: US$19.184b
  • Shares outstanding: 589.39m
  • Website: https://www.southwest.com

Number of Employees


  • Southwest Airlines Co.
  • PO Box 36611
  • Dallas
  • Texas
  • 75235-1611
  • United States


TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
LUVNYSE (New York Stock Exchange)YesCommon StockUSUSDOct 1975
SWNDB (Deutsche Boerse AG)YesCommon StockDEEUROct 1975
SWNXTRA (XETRA Trading Platform)YesCommon StockDEEUROct 1975
LUV *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNOct 1975
0L8FLSE (London Stock Exchange)YesCommon StockGBUSDOct 1975
S1OU34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 1 REPR 1 SHS UNSPONBRBRLJan 2020


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, 2019, the company operated a total of 747 Boeing 737 aircraft; and served 101 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, and restaurants. 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, an iPadOS app, and an android app; and SWABIZ, an online booking tool. Further, it offers ancillary services, such as Southwest's EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. Southwest Airlines Co. was founded in 1967 and is headquartered in Dallas, Texas. 

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/05/29 02:31
End of Day Share Price2020/05/28 00:00
Annual Earnings2019/12/31

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.