Our analysis is based on comparing Allegiant Travel Co. with the following peers – SkyWest, Inc, Southwest Airlines Co., Alaska Air Group, Inc., JetBlue Airways Corporation, Delta Air Lines, Inc., Hawaiian Holdings, Inc., Republic Airways Holdings, Inc., Spirit Airlines, Inc., United Continental Holdings, Inc. and American Airlines Group, Inc. (SKYW-US, LUV-US, ALK-US, JBLU-US, DAL-US, HA-US, RJETQ-US, SAVE-US, UAL-US and AAL-US).
Allegiant Travel Co.’s dividend yield is 2.32 percent and its dividend payout is 11.46 percent. This compares to a peer median dividend yield of 1.19 percent and a payout level of 8.62 percent. This type of dividend performance might make it a good stock for dividend investors. In addition, the company’s relatively good dividend quality score of 83 out of a possible score of 100 points to some sustainability of its robust payout ratio, and underscores its attractiveness for dividend investors seeking current income.
Dividend Quality Overview
- Over the last twelve months (prior to June 30, 2016), ALGT-US paid a high quality dividend, which represents a yield of 1.02% at the current price.
- Dividend quality trend has not been consistent over the last five years. Dividends were paid during 3 of these years — of these 1 was high quality, 1 was medium quality and 1 was low quality.
- The ending cash balance, with a dividend coverage of 6.82x, provides a substantial cushion in case of a significant reduction of cash flows in the future.
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Over the last twelve months (prior to June 30, 2016), ALGT-US paid a high quality dividend.
The source of the company’s cash to support the dividend paid over the last twelve months is operating cash flow (coverage of 7.17x), investing cash flow (coverage of -4.15x), issuance cash flow (coverage of -1.79x) and twelve-month prior cash (coverage of 7.14x), for a total dividend coverage of 7.82x.
ALGT-US‘s issuance cash flow includes outflows from net share buybacks (coverage of -1.98x). Thus, the total coverage including share buybacks is 9.80x, which reflects our assumption that the cash paid for share buybacks is discretionary and could instead be used to pay dividends.
These coverage ratio factors imply that the firm’s dividends are wholly paid from operating and investing cash flows net of any debt repayments, which suggests a high dividend quality.
|Dividend Yield (%)||0||2.72||0||1.6||2.21||2.32|
|Dividend Payout (%)||0||0||0||0||8.5||11.46|
A complete list of metrics and analysis is available on the company page.
Allegiant Travel Co. is a leisure travel company focused on providing travel services to residents of small, underserved cities in the United States. Its travel services and products include scheduled service air transportation, which provides scheduled air transportation on limited frequency nonstop flights predominantly between small city markets and popular leisure destinations; air-related travel services and products, which provides unbundled air-related services and products in conjunction with air transportation for an additional cost to customers; third party travel products, which offer third party travel products such as hotel rooms, ground transportation, rental cars and hotel shuttle products and attractions bundled with the purchase of its air transportation; fixed fee contract air transportation, which provides air transportation through fixed fee agreements and charter service on a seasonal and ad-hoc basis. The company was founded in May 2005 and is headquartered in Las Vegas, NV.
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