Along with lower oil prices, airline stocks look attractive in their own right. For instance, income-oriented investors may notice that airline stocks have seen improved dividend-yield growth. Additionally, the sector shows relatively cheap valuations. Airline stocks have a 7 times price-to-earnings ratio, whereas the broader transportation stocks have a 15 times ratio and the S&P 500 index shows 17 times P/E.
SEE MORE: Airline ETF Flying High
“Among the majors, we sense investors are most interested in United Continental given the catalyst path including imminent leadership changes. American is also garnering more interest given positive commentary on Latin America and what seems to be a more confident tone on the unit revenue environment now that headwinds are lapping. Delta sentiment remains mixed as many question the achievability of the third-quarter passenger revenue per available seat mile (PRASM) guide given the level of improvement required in September,” adds Credit Suisse.
For more information on airline ETFs, visit our Airline category.
U.S. Global Jets ETF