Air France-KLM (OTC:AFLYY) and Southwest Airlines (NYSE:LUV) Head-To-Head Comparison

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

Risk and Volatility

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

Institutional and Insider Ownership

0.9% of Air France-KLM shares are held by institutional investors. Comparatively, 80.8% of Southwest Airlines shares are held by institutional investors. 0.3% of Southwest Airlines shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current recommendations for Air France-KLM and Southwest Airlines, as provided by MarketBeat.com.

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

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

Profitability

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

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

Earnings and Valuation

This table compares Air France-KLM and Southwest Airlines”s top-line revenue, earnings per share and valuation.

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

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 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.

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.