Increased dividend payout
Delta Air Lines (DAL) increased its dividend payout 50.0% in 3Q17, resulting in ~$0.31 dividend per share. At that rate, DAL has an indicated dividend yield of 2.3%.
This is the highest yield among the four dividend-paying airlines. Alaska Air Group (ALK) has a dividend yield of 1.6%, the next highest in the group. Southwest Airlines (LUV) has a dividend yield of 0.94%. American Airlines (AAL) has an indicated dividend yield of 0.80%.
Cash dividend coverage ratio
DAL’s cash dividend ratio was 4.0x at the end of 3Q17, indicating its ability to sustain dividend payouts. This ratio helps determine a company’s ability to continue dividend payouts. A ratio of less than 1.0x indicates dividend payouts that are higher than the company’s cash flows, which may be difficult to sustain in the future.
Can dividend payouts increase?
Investors can probably expect Delta Air Lines’ dividends to remain constant at the current rate for the next three quarters. Despite this increase, Delta Air Lines’ dividend isn’t anywhere near other high-paying dividend stocks. For exposure to dividend stocks, you can invest in the iShares Core High Dividend (HDV).