Southwest Airlines reinstates quarterly dividends
Airline sector returns to profitability as travel demand rebounds
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Shareholders of Southwest Airlines will once again receive quarterly dividends after the air carrier suspended the cash disbursements in early 2020 to navigate the pandemic and adhere to requirements for federal aid.
In a press release issued Dec. 7, Southwest announced it's board of directors reinstated a quarterly cash dividend of $.18 per share to shareholders of record at the close of business on Jan. 10, 2023.
Southwest Airlines aircraft flies past the U.S. Capitol before landing at Reagan National Airport in Arlington, Va,, Jan. 24, 2022. (Reuters/Joshua Roberts / Reuters Photos)
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In an interview with FOX Business, David Russell, VP of market intelligence at TradeStation, said, "Dividends are a hallmark of stability and confidence, while cutting them can be a black eye on your reputation."
"Southwest's move is a sign that management sees business coming back in 2023," he continued. "It's another sign of life returning to normal after nearly three years of disruption."
"Airlines are also seeing a return to profitability as demand rebounds, but a lot of investors remain skeptical because they're worried about a recession," Russell added.
The company's quarterly dividend of $.18 per share, or $.72 per share annualized, is the same as its dividend before the coronavirus pandemic and equals nearly $428 million and an approximate 1.8% dividend yield on an annual basis.
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Southwest CEO Bob Jordan said in the release, "Today's announcement reflects the strong return in demand for air travel and the company's solid operating and financial results since March 2022,"
"The reinstatement of our quarterly dividend also reflects our balance sheet strength and continued focus on generating consistently healthy earnings, margins, and long-term capital returns," he finished.
As of 11:30 a.m., shares of Southwest Airlines were down approximately 5.46% but have enjoyed a slight gain of 0.83% into positive territory over the last month.
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Southwest Airlines
| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| LUV | SOUTHWEST AIRLINES CO. | 29.91 | -0.70 | -2.29% |