An airline business needs huge investments and resources. The returns in the airline industry are as high as the risk involved in the overall business operations. In the current global economic situation, it would be right to say that airline stocks are volatile due to government policies, fluctuations in crude oil, and the insufficiency of revenue flowing into the market. Some industry experts are skeptical if the industry will sustain and bounce back to business as usual. Let’s talk about American Airlines Group, one of the largest airlines in the world. The airline stocks in the U.S. market (NASDAQ: AAL) have shown extreme volatility recently, with stocks going down one day and going up the next day.
American Airlines Group, Inc is publicly traded under NASDAQ: AAL at https://www.webull.com/quote/nasdaq-aal with about $6 billion market capitalization. It operates as a network air carrier through its subsidiaries. American Airlines Group stocks have a high percentage of institutional ownership (55.68{58849725599df2cbf66128294c226150d2f2c7ca39cec4a25203941898940b7d}), indicating strong market trust in the company, whereas insiders hold only 1.03{58849725599df2cbf66128294c226150d2f2c7ca39cec4a25203941898940b7d} of the stocks.
Key Factors of AAL Stocks
- Return on Equity (ROE)
Return on Equity indicates the percentage amount a company earns on the shareholder’s investments. The ROE of American Airlines was considerably higher than its peers in the industry for the quarter ended in September 2020.
- Earnings per Share (EPS)
The amount of money that a company earns per share is the Earning per Share of the company. Investors are always looking for this measure before investing. As per NASDAQ: AAL, the EPS for the quarter ended Jun 2020 is at a low of -7.82{58849725599df2cbf66128294c226150d2f2c7ca39cec4a25203941898940b7d}. American Airlines Group has a substantially lower EPS when compared to its competitors in the industry.
- Price to Earnings Ratio (PER)
Price to Earnings Ratio compares the current market price of the share with the earnings per share. It gives investors an idea about the market value of the company. Based on the last reports of NASDAQ: AAL, the PER in 2019 was 2.57 and estimated to come down to -0.66 in 2020.
- Dividend
AAL is not a very high paying dividend stock. It pays a dividend amount of $0.10 in cash, which is quite low compared to the other airline stocks.
The airline stocks in the U.S. market have been showing a downward graph this year. However, the airline industry can boost its growth due to the undying travel demand among people. American Airlines Group is a big player, controls a large percentage of the U.S. airline industry, and its stocks (NASDAQ: AAL) are a winner in the long run. You can check how to use NASDAQ TotalView before trading.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.
