I added more shares to my current position of Delta Air Lines, Inc. (DAL)
46 shares @ $57.18 on 12/02/2019.
This increases my forward 12-month dividend income by $74.06 to a total of $10,068.96. I also updated my portfolio page to reflect the change.
I have been adding to Delta for a few months now. I have been adding one share here and there. I was waiting until I had enough money to make a big buy.
The company has been increasing dividends for six years. It’s not a very long time, but I do like the growth and low payout ratio. The most recent dividend increase was 15% in July this year. The company has a three-year growth rate of 42%. I believe that the company can continue to grow its dividend in the low double-digits for the foreseeable future. Delta has a 23% payout ratio that gives the company plenty of room for more increases.
The company has a 5-year dividend yield average of 1.70%. You can buy it right now with a dividend yield of 2.89%. That is a good indicator that the stock is undervalued bases on its normal.
The stock has a PE of 7.98, which is very low PE on its own. It is also much lower than the company 5-year PE average of 13.30. Not only is the current PE low to its 5-year average, but the forward PE is 7.47. This suggests that future earning is higher than last year. As we know, price follows earnings.
I find DAL to be undervalued, and I recommend it as a BUY at this time. I have a fair value price of $78.98. This means that DAL is 41% undervalued based on today’s price of $55.97 (12/10/2019).
What do you think about the company? Plan on owning it or already do? Or why not?
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