Delta Air Lines (NYSE: DAL) has proven to be a resilient corporate entity throughout its long history. From bankruptcies to mergers and acquisitions, the company has endured in good times and bad times, in wartime and in peace. Delta rebounded even after its stock was delisted in 2005 after a tough period and relisted in 2007 — and even had its best 12-year stretch in its history.
Delta shares didn't fare so well during the pandemic, but the business has recovered. Delta recently reported its highest earnings and revenue due to the booming demand for travel, but is the stock right for you? This guide will explore how to buy Delta stock along with the pros and cons.
How to Buy Delta Stock
Gathering information on how to purchase Delta stock is not a difficult step to take, nor is the process of buying the stock itself. It's an easy-to-follow process that puts you in control.
Step 1: Conduct Your Research
Information-gathering is at the heart of investing wisely. The overused adage that knowledge is power rings true in this case. While it's not altogether necessary to acquire the knowledge of a sage broker, it's important that you gather enough understanding to make sound decisions. With so many online options you can learn at your own pace. Don't limit your research to the basic components of what stock to invest in. Your research should also include how you plan to go about investing.
Step 2: Choose a Broker
Some investors choose to go about it alone, using online brokers to manage their transactions. Others prefer one-on-one interaction and relationship-building from full-service investment firms. There is no right or wrong answer. And while each has its pros and cons, it's about personal preference and what suits you as an investor. Choose wisely.
Step 3: Establish and Build a Relationship with a Broker
This is a critical step toward building the kind of investment portfolio that fits your needs. It's important because it allows you to build trust with your broker. It allows them to become familiar with your goals and suggest the kinds of investment vehicles to get you there. Always remember that the brokers work for you and that you make the ultimate decision.
Step 4: Fund an Account
Interested in an online brokerage? Create an account and link your banking information to transfer funds or wire money into the account. Either way, once you deposit the funds, you're ready to start trading.
Step 5: Finalize Your Delta Stock Purchase
Delta trades on the New York Stock Exchange under the symbol DAL. You're now ready to purchase the airline stock at the current per-share price, less any fees or related costs using either your online or your neighborhood broker.
Delta Stock and History
Delta Air Lines is a major American airline based in Atlanta, Georgia. It was founded in 1929 as a crop-dusting company. Over the years, Delta has grown into a leading global airline. It achieved this through strategic mergers and acquisitions. Delta has faced challenges like the 9/11 attacks and the COVID-19 pandemic. However, it has shown resilience and recovered well. The airline is publicly traded on the New York Stock Exchange with the ticker symbol "DAL." Delta's stock performance is a key indicator of the airline industry's health. Analyzing Delta's milestones and stock trends offers insights into its strategies and future direction.
What is Delta?
Delta Air Lines is a major player in air transportation. It offers services for passengers and cargo. The company has two main segments. The Airline segment includes domestic and international flights. The Refinery segment produces jet fuel to support its operations. Founded in 1928, Delta is based in Atlanta, GA. It has become one of the largest and most respected airlines worldwide. The airline has seen growth in premium ticket sales, emphasizing quality travel experiences. The SkyMiles program allows customers to earn miles for flights and redeem rewards, boosting loyalty. With a strong history and focus, Delta Air Lines connects millions of travelers and supports global trade.
Delta's Stock History
Delta Airlines has seen significant changes in its stock history and recently reported a quarterly earnings growth of 0.29. The company has a dividend share of 0.45 and revenue per share of 94.006. These figures indicate the airline's performance in operations, even amidst challenges like changing fuel prices and economic factors affecting travel demand.
The difference between Delta's market value and its intrinsic value is often due to broader market sentiment and macroeconomic factors. Market value reflects investor perceptions and trading dynamics, while intrinsic value evaluates the company's fundamental worth based on its earnings potential and assets. Delta’s book value, which indicates its net asset value, typically varies from both market and intrinsic values as it is based on historical costs and may not consider future growth potential.
The assessments of Delta Airlines show that quarterly earnings growth, market sentiment, and financial fundamentals are interconnected, highlighting the trends in its stock performance within a fluctuating industry.
Future Outlook for Delta
Delta Air Lines is facing a tough outlook for the future, as its stock has decreased by 7.96% over the past month and is expected to open at $40.14. This decline could affect how investors feel, especially considering the airline's low price-to-earnings (P/E) ratio of 5.52, which indicates that the stock may be undervalued but also brings up questions about potential profitability moving forward.
The average true range (ATR14) of $1.16 shows moderate volatility, indicating potential price movements that might influence investor confidence in both positive and negative ways. A high volatility, with a beta of 1.35, indicates that Delta's stock is more responsive to market changes relative to the overall market, which may discourage risk-averse investors.
The recovery and growth potential of Delta Air Lines will be impacted by general market trends and economic conditions. If the overall market stabilizes, Delta might see better investor sentiment. However, ongoing volatility and external challenges could affect its performance in the future, so careful monitoring will be important for potential investors.
Should You Buy Delta Stock?
Delta Air Lines is a global brand with nearly a century of business history. Those observations alone make the company's stock an intriguing option. Here are several reasons why you should consider purchasing Delta stock.
International Alliances
Agreements and joint ventures with foreign carriers, including Air France-KLM, Virgin Atlantic, Virgin Australia, and Korean Air, among others, help strengthen Delta's global reach while accessing international markets in a way that adds long-term value to the brand.
Lengthy Corporate History
With more than 90 years in business, Delta has a long history for investors to scrutinize before making a decision. It creates an informed investor, which should be the ultimate goal whether you purchase Delta stock.
Upward Trajectory
Delta recently just completed its most successful quarter with revenue totaling $15.6 billion. Operating income came in at a record $2.5 billion. The airline seems well-positioned as it moves toward the future.
Expanding Industry
Travel demand is strong as people play catch-up after missing time because of the lockdowns. The airline and travel industries are expanding, and that means good news for Delta stock.
Considerations Before Buying Delta Stock
Delta's stock has maintained strong momentum over a sustained period. The company has strong financials and it's an industry leader. In spite of those strengths, there are some things you should be mindful of before purchasing Delta stock.
Highly Regulated Industry
The Federal Aviation Administration often issues regulations and policies for maintaining and operating aircraft. Additional operating expenses usually accompany these directives, which can directly affect the bottom line.
Reliance on Third-Party Carriers
Delta partners with several 3rd-party carriers to supplement the company's operations. If these providers encounter challenges that ultimately jeopardize their agreement, it can adversely impact Delta's business dealings. If it spans an extended period, these challenges, which are usually out of Delta's control, could potentially increase costs while decreasing revenue.
Negative Publicity From Safety Issues
Like all commercial carriers, Delta puts a strong emphasis on safety. But if one of its aircraft or 3rd-party carriers is involved in an accident, it fuels a negative perception about flying, which could harm the company's reputation and its business.
Labor-Related Disruptions
Roughly 20% of Delta's workforce is unionized. They include pilots, flight attendants and air dispatchers. The airline industry is labor-intensive, and it often relies on a harmonious relationship between the various unions and the airline. If a work stoppage occurs due to contractual disagreements, it will directly affect Delta's ability to conduct business.
Is Delta Stock Right for You?
The most enduring corporate brands usually have compelling stories that include overcoming tough times. Delta has stood on the brink on several occasions throughout its lengthy history. But disciplined and principled leadership led the company out of despair, to the point where it is now an industry leader with solid cash flow.
The air transportation company's outlook is positive: It has significant cash on hand and its quarterly earnings are on the uptick. Delta stock has its perks, but investors should consider their risk tolerance and assess the stock's fair value before making a decision.
Frequently Asked Questions
Is Delta stock a buy?
Delta stock is benefitting from the rising demand for travel. As long as the demand for travel continues to grow, Delta stock can reward investors. It is important to consider your risk tolerance and long-term financial goals before buying Delta stock.
Will Delta pay a dividend?
Delta recently reinstated its dividend, starting at a quarterly dividend of $0.10 per share. Delta’s quarterly dividend per share peaked at $0.4025 before the pandemic.
How do I buy Delta stock?
To buy Delta stock, open a brokerage account and fund it. Research Delta Air Lines (DAL), then search for the stock on your platform, place an order, and confirm the transaction.