After a Dividend Increase, Is This Airline a Buy?

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The following video is part of our "Motley Fool Conversations" series in which industrials editor/analyst Brendan Byrnes and consumer goods editor/analyst Austin Smith discuss topics across the investing world.

In today's edition, Brendan and Austin discuss recent news from Southwest Airlines. Southwest is the only major airline to pay a dividend, and the company recently announced that it will more than double the dividend to $0.01 per share, good for about a 0.5% yield. Southwest also raised its ceiling for share repurchases to $1 billion. The company announced that it will delay delivery of 30 Boeing 737s for four years, which will save it more than $1 billion through 2014. Southwest is delaying the purchases in order to focus on achieving its goal of 15% ROIC. Watch below to find out if Brendan thinks these are good moves for the company and if it rates as a buy in his book.

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At the time this article was published Austin Smithhas no positions in the stocks mentioned above.Brendan Byrneshas no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above.Motley Fool newsletter services recommendSouthwest Airlines. Try any of our Foolish newsletter servicesfree for 30 days. We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. The Motley Fool has adisclosure policy.

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