Given its attractive valuation, we believe Alaska Air stock (NYSE: ALK) is a better pick than its peer United Airlines stock (NASDAQ
NDAQ
: UAL). If we look at stock returns, United Airlines, with 26% returns this year, has fared much better than Alaska Air, down 6%, and the broader S&P 500 index, up 17%. There is more to the comparison, and in the sections below, we discuss why we believe ALK will offer better returns than UAL in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of Alaska Air vs. United Airlines: Which Stock Is A Better Bet? Parts of the analysis are summarized below.
Interestingly, ALK has had a Sharpe Ratio of -0.1 while the figure stood at 0.1 for UAL, lower than 0.6 for the S&P 500 Index over the same period. This compares with the Sharpe of 1.3 for the Trefis Reinforced Value portfolio. Sharpe is a measure of return per unit of risk, and high-performance portfolios can provide the best of both worlds.
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