Daily Stock Pick: Delta Air Lines
A portfolio of stocks I'm building, named Ivy, holds 52 dividend dogs. Ivy is the fourth portfolio I've built (at a one dividend dog per week pace) since 2014. Four portfolios = IV!
Today I'm reviewing the first of five industrials sector stocks this week striving to become the eighth of eight from that sector to join the Ivy folio.
That industrials sector includes twenty-three industries all related to designing, fabricating and servicing stuff we want and use. The industrials industries range from aerospace and defense to waste management with all the transportation, business services, and equipment required in between.
Today I'm reviewing a large-cap airlines company named Delta Air Lines Inc. Their trading ticker symbol is DAL. I last reported DAL for the IVY folio a year ago on August 21, 2018.
Atlanta-based Delta Air Lines is one of the world's largest airlines, flying to more than 325 destinations in 60 countries.
Delta operates a hub-and-spoke system, where it gathers and distributes passengers across the globe through key locations in Atlanta, New York, Salt Lake City, Detroit, Seattle, and Minneapolis-St. Paul.
Delta generated just over $41 billion in revenue during 2017 and operated a mainline fleet of 856 aircraft at year-end 2017.
I use three key data points to gauge dividend-paying equities or funds like Delta Air Lines Inc:
(1) Price
(2) Dividends
(3) Returns
Besides those three, several other keys will finally unlock an equity or fund in which to invest or not.
Those three basic keys, however, best tell whether a company has made, is making, and will make money.
DAL Price
Delta's price per share closed at $58.04 Friday. A year ago its price was $57.42. In a year its price grew $1.38 or 2.4%.
Assuming Delta's stock trades in the range of $50.00 to $70.00 this year, Delta's recent $58.04 price could rise by $3.96 and go to $62.00 by August 2020.
DAL Dividends
Delta's latest quarterly dividend was $0.405 paid August 15th.
That $0.405 Q payout generates an annual payout of $1.62 yielding 2.79% based on Friday's $58.04 closing price.
Gains For DAL?
Adding the $1.62 annual estimated dividend to my $3.96 estimate of Delta's price increase shows a $5.58 potential gross gain, per share, which will be reduced by costs to trade these shares.
Say we put a little under $1,000.00 today at the $58.04 recent stock price, we'd buy 17 Delta Air Lines Inc shares.
A $10 broker fee paid half at purchase and half at sale will cost us $0.59 per share.
Subtract that $0.59 brokerage cost from the estimated $5.58 gross estimated gain leaves a net gain of $4.99 X 17 shares = ($84.83) or an 8.9% net gain on a $986.68 investment.
Therefore, Delta Air Lines Inc whose trading ticker symbol is DAL now shows a possible net gain of 8.9% including a 2.79% dividend yield.
Nineteen brokers track Delta Air Lines Inc stock:
Ten say "buy" DAL
Four say DAL will "outperform"
Five say "hold" DAL
Their consensus score of 1.7 equates to "Outperform." The brokers like it!
A Look at Delta Air Lines Inc shows it has made money, is making money, and could net an 8.9% gain including its 2.79% dividend yield. It could be more, it could be less.
The above speculation is based on past year performance. The actual results remain to be seen to learn if Delta Air Lines Inc is worth your time and money.