An Analysis of Delta Air Lines, a Top Dividend Grower
Delta Air Lines’ revenue and earnings in 2015 and 2016
Delta Air Lines’ (DAL) revenue rose 1% in 2015 and fell 3% in 2016. Its domestic segment’s revenue drove the growth in both years, while its Atlantic and Latin American revenue rose in 2015 before falling in 2016. Its Pacific segment’s revenue fell in 2015 before rising in 2016.
The company’s operating expenses fell 14% in 2015 and 1% in 2016. As a result, its operating income rose 254% in 2015 before falling 11% in 2016. Its interest expenses fell in both years. These developments translated into 622% EPS (earnings per share) growth in 2015 and 3% EPS growth in 2016. Share buybacks enhanced its EPS.
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Delta Air Lines’ revenue and earnings in the first nine months of 2017
Delta Air Lines’ revenue rose 3% in the first nine months of 2017, driven by every segment but the Pacific segment. The company’s operating expenses rose 8%, its operating income fell 17%, and its interest expenses rose, all of which translated into a 16% EPS fall. Its EPS were enhanced by share buybacks, and the company has maintained a good free cash flow balance. However, it has reported a substantial fall YTD (year-to-date).
The SPDR S&P Dividend ETF (SDY), a dividend fund, has 15% exposure to industrials. It has a 2.4% dividend yield and a PE (price-to-earnings) ratio of 20x. The iShares Core Dividend Growth ETF (DGRO) has 13% exposure to industrials, a 2% dividend yield, and a PE ratio of 20.6x. In the next part, we’ll look at the company’s dividends and compare its performance with that of broad market indexes (SPX-INDEX) (SPY) (DJIA-INDEX) (DIA) (COMP-INDEX) (ONEQ).