JetBlue Airways Corporation (NASDAQ: JBLU) and Southwest Airlines Company (NYSE:LUV) are both mid-cap transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, risk, earnings, valuation and analyst recommendations.

Analyst Recommendations

This is a summary of recent recommendations for JetBlue Airways Corporation and Southwest Airlines Company, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
JetBlue Airways Corporation 1 7 3 0 2.18
Southwest Airlines Company 0 5 10 0 2.67

JetBlue Airways Corporation presently has a consensus price target of $25.38, indicating a potential upside of 11.34%. Southwest Airlines Company has a consensus price target of $58.17, indicating a potential downside of 3.52%. Given JetBlue Airways Corporation’s higher probable upside, equities research analysts plainly believe JetBlue Airways Corporation is more favorable than Southwest Airlines Company.

Valuation and Earnings

This table compares JetBlue Airways Corporation and Southwest Airlines Company’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
JetBlue Airways Corporation $6.62 billion 1.15 $1.48 billion $1.86 12.25
Southwest Airlines Company $20.48 billion 1.78 $5.01 billion $3.31 18.21

Southwest Airlines Company has higher revenue and earnings than JetBlue Airways Corporation. JetBlue Airways Corporation is trading at a lower price-to-earnings ratio than Southwest Airlines Company, indicating that it is currently the more affordable of the two stocks.

Dividends

Southwest Airlines Company pays an annual dividend of $0.50 per share and has a dividend yield of 0.8%. JetBlue Airways Corporation does not pay a dividend. Southwest Airlines Company pays out 15.1% of its earnings in the form of a dividend. Southwest Airlines Company has increased its dividend for 5 consecutive years.

Insider & Institutional Ownership

84.9% of JetBlue Airways Corporation shares are held by institutional investors. Comparatively, 80.6% of Southwest Airlines Company shares are held by institutional investors. 0.6% of JetBlue Airways Corporation shares are held by company insiders. Comparatively, 0.2% of Southwest Airlines Company shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares JetBlue Airways Corporation and Southwest Airlines Company’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
JetBlue Airways Corporation 9.61% 16.42% 6.70%
Southwest Airlines Company 10.16% 26.75% 9.40%

Volatility and Risk

JetBlue Airways Corporation has a beta of 0.52, meaning that its stock price is 48% less volatile than the S&P 500. Comparatively, Southwest Airlines Company has a beta of 1.26, meaning that its stock price is 26% more volatile than the S&P 500.

Summary

Southwest Airlines Company beats JetBlue Airways Corporation on 13 of the 17 factors compared between the two stocks.

JetBlue Airways Corporation Company Profile

JetBlue Airways Corporation is a passenger carrier company. The Company provides air transportation services across the United States, the Caribbean and Latin America. Its segments include Domestic, and Caribbean & Latin America. It operates various kinds of aircrafts, including Airbus A321, Airbus A320 and Embraer E190. It also provides premium transcontinental product called Mint. As of December 31, 2016, Mint included 16 fully lie-flat seats, four of which were in suites with a privacy door. The Company also provides Fly-Fi in-flight Internet service across its Airbus fleet. It provides its customers a choice to purchase tickets from three branded fares, which include Blue, Blue Plus and Blue Flex. Each of these fare include different offerings, such as free checked bags, reduced change fees and additional TrueBlue points. As of December 31, 2016, its Airbus A321 aircraft in a single cabin layout had 200 seats and those with Mint premium service had a seating capacity of 159 seats.

Southwest Airlines Company Company Profile

Southwest Airlines Co. (Southwest) operates Southwest Airlines, a passenger airline that provides scheduled air transportation in the United States and near-international markets. The Company provides point-to-point service. The Company offers ancillary service offerings, such as Southwest’s EarlyBird Check-In and transportation of pets and unaccompanied minors, in accordance with Southwest’s respective policies. Southwest’s Rapid Rewards frequent flyer program enables program members (Members) to earn points for every dollar spent on Southwest fares. Its Internet Website, Southwest.com, is an avenue for Southwest customers to purchase and manage travel online. As of December 31, 2016, Southwest operated a total of 723 Boeing 737 aircraft and served 101 destinations in 40 states, the District of Columbia, the Commonwealth of Puerto Rico, and eight near-international countries: Mexico, Jamaica, The Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, and Cuba.

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