Southwest Airlines (NYSE:LUV) & Air France-KLM (OTC:AFLYY) Head-To-Head Survey

Southwest Airlines (NYSE:LUV) and Air France-KLM (OTC:AFLYY) are both transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Southwest Airlines and Air France-KLM, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Southwest Airlines	7	7	4	0	1.83
Air France-KLM	0	1	0	0	2.00

Southwest Airlines presently has a consensus price target of $31.72, indicating a potential downside of 1.29%. Given Southwest Airlines’ higher probable upside, analysts clearly believe Southwest Airlines is more favorable than Air France-KLM.

Institutional and Insider Ownership

80.8% of Southwest Airlines shares are owned by institutional investors. Comparatively, 0.9% of Air France-KLM shares are owned by institutional investors. 0.3% of Southwest Airlines shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Southwest Airlines and Air France-KLM’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Southwest Airlines	1.69%	5.77%	1.70%
Air France-KLM	0.39%	19.62%	0.34%

Risk and Volatility

Southwest Airlines has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Air France-KLM has a beta of 1.58, suggesting that its stock price is 58% more volatile than the S&P 500.

Valuation and Earnings

This table compares Southwest Airlines and Air France-KLM”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Southwest Airlines	$27.48 billion	0.69	$465.00 million	$0.72	44.64
Air France-KLM	$32.49 billion	0.08	$1.01 billion	$0.11	9.55

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

Summary

Southwest Airlines beats Air France-KLM on 9 of the 14 factors compared between the two stocks.

About Southwest Airlines

Southwest Airlines Co. operates as a passenger airline company that provides scheduled air transportation services in the United States and near-international markets. As of December 31, 2023, the company operated a total fleet of 817 Boeing 737 aircraft; and served 121 destinations in 42 states, the District of Columbia, and the Commonwealth of Puerto Rico, as well as ten 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 provides inflight entertainment and connectivity services on Wi-Fi enabled aircraft; and Rapid Rewards loyalty program that enables program members to earn points for dollars spent on Southwest base fares. In addition, the company offers a suite of digital platforms to support customers’ travel needs, including websites and apps; and SWABIZ, an online booking tool. Further, it provides ancillary services, such as Southwest’s EarlyBird Check-In, upgraded boarding, and transportation of pets and unaccompanied minors. Southwest Airlines Co. was incorporated in 1967 and is headquartered in Dallas, Texas.

About Air France-KLM

AIR FRANCE-KLM is an airline company. The Company’s core business is passenger transport, cargo transport, and aircraft maintenance services. The Group is the world leader in terms of international passenger traffic; and its cargo activity (not including integrators) and is one of the world’s major maintenance service providers. The Group structure is simple: a holding company with two airline subsidiaries. Air France-KLM has established a set of clearly defined commitments to ensure that its strategy of profitable growth goes hand in hand with environmental quality and social progress.