Thursday, October 13, 2011

Could the News be Any Worse for Airline Companies?

Talk about bad news. AMR Corporation (AMR) will be announcing its latest quarterly earnings on October 17, and from what you read on almost every financial website, a bankruptcy may be looming for this company in the opinion of many investors. After all, for the quarter ending June 30, the company generated negative earnings of 2.02 per share.

On top of that, a woman has just sued Continental Airlines, a subsidiary of United Continental Holdings, Inc. (UAL), because a flight she was on was too turbulent for her. The woman claims that she has post-traumatic stress disorder from the stress of the flight, causing her to fear flying, and in turn has affect her career. It makes you wonder if there are any airline stocks worth buying.

Fortunately there are a few airlines that are generated positive earnings and even paying dividends. has turned up a dozen airline stocks, a third of which generate dividends. As an example, Ryanair Holdings plc (RYAAY) is the Dublin based airline with flights in Ireland, the United Kingdom, Europe, and Morocco. The stock trades at 13.9 times current ernings and 10.5 times future earnings. It has a price to earnings growth ratio of 0.82. The company paid its first cash dividend last year.

Cathay Pacific Airways Ltd. (CPCAY.PK), the Hong Kong based airline, has flights throughout Asia, the Middle East, Africa, and North America. It pays a generous yield of 2.5% and trades at 5.0 times forward earnings.

If you want to check out some of the other airlines, see the free list of airline stocks at

Disclosure: Author owns RYAAY.


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