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Southwest Airlines Co. (LUV) logo

Southwest Airlines Co.

S&P 500
LUV|Industrials|Airlines|$41.31|P/E 27.4|MCap 20.2B|NYSE

Last update: May 9, 2026 at 09:32

Dividend Safety Rating

54/ 100Caution

LUV's dividend shows some areas that warrant monitoring. Strengths include a 48.0% earnings payout ratio & 24.6% cfo payout ratio. Areas of concern: 96.0% fcf payout ratio & 0.5x current ratio. The dividend has been growing at a 31.95% 5-year CAGR.

Based on 15 of 15 metrics

Strengths

  • Earnings Payout Ratio: 48.0%Low earnings payout ratio leaves room to grow the dividend.
  • CFO Payout Ratio: 24.6%Operating cash flow strongly supports the payout.
  • Net Debt / Total Assets: 9.5%Healthy balance sheet with low net debt.

Risks

  • Current Ratio: 0.5xLimited short-term liquidity to meet obligations.
  • Dividend Cut: YesDividend was cut or suspended in recent history.
  • FCF Payout Ratio: 96.0%Free cash flow is tight relative to the dividend.

Payout & Coverage

Safe
Earnings Payout Ratio
48.0%Very Safe
FCF Payout Ratio
96.0%Warning
CFO Payout Ratio
24.6%Very Safe
Interest Coverage
6.0xSafe

Balance Sheet

Caution
Net Debt / Total Assets
9.5%Very Safe
Current Ratio
0.5xDanger
Debt-to-Equity
93.0Safe

Profitability

Warning
Return on Equity
10.1%Caution
Operating Margin
4.5%Warning
Gross Margin
18.9%Warning
Profit Margin Stability
VolatileWarning

Dividend Track Record

Caution
Dividend Streak
3 yrsWarning
Dividend Cut
YesDanger
5-Year Dividend CAGR
31.9%Very Safe
Earnings Stability
Mostly StableCaution

About Southwest Airlines Co.

Southwest Airlines Co. operates as a major low-cost passenger airline serving key domestic and select international markets across the United States, Puerto Rico, Mexico, Jamaica, the Bahamas, Aruba, Dominican Republic, Costa Rica, Belize, Cuba, Cayman Islands, and Turks and Caicos. The company provides scheduled air transportation with a single-aircraft-type fleet of Boeing 737s, emphasizing point-to-point routes, high-frequency service, and customer-friendly policies like no assigned seating options in its traditional model alongside recent introductions of assigned seating, extra legroom, and basic economy fares. Southwest Airlines Co. offers ancillary services including EarlyBird Check-In, upgraded boarding, pet transportation, unaccompanied minors, bag fees, Rapid Rewards loyalty program with free Wi-Fi for members, and expanded online distribution. It focuses on operational reliability through technology enhancements, delivering hospitality to leisure and business travelers while competing in the competitive airline industry. Founded in 1967 and headquartered in Dallas, Texas, Southwest Airlines Co. plays a pivotal role in accessible air travel with its point-to-point network and customer-centric approach.

Dividend Overview

Dividend Yield

1.74%

Annual Dividend

$0.72

Frequency

Quarterly

Payout Ratio

48.00%

FCF Payout Ratio

96.01%

Stock Price

$41.31

52-Week Range

$28.98 $55.11

Dividend History (2016–2025)

LUV annual dividend per share and yield history

Earnings & Profitability

LUV earnings per share and net profit margin

Key Dates

Last Ex-Dividend Date

March 12, 2026

Last Payment Date

April 2, 2026

Dividend Growth

3-Year Dividend CAGR

0.00%

5-Year Dividend CAGR

31.95%

10-Year Dividend CAGR

9.71%

3-Year Total Growth

0.00%

5-Year Total Growth

300.00%

10-Year Total Growth

152.63%

Income Calculator

LUV Dividend Calculator

Total Investment

$4,131.00

Annual Income

$72.00

Quarterly Income

$18.00

Monthly Income

$6.00

Similar Dividend Stocks

StockYield5Y CAGRPrice
Southwest Airlines Co. (LUV) logo
LUV
1.74%31.95%$41.31
J.B. Hunt Transport Services, Inc. (JBHT) logo
JBHT
0.72%10.26%$245.40

Frequently Asked Questions

What is LUV's current dividend yield?
Southwest Airlines Co. (LUV) currently has a dividend yield of 1.74%, based on a stock price of $41.31 and an annual dividend of $0.72.
When is LUV's next dividend payment date?
LUV's next ex-dividend date is 2026-03-12 and the next payment date is 2026-04-02. You must own the stock before the ex-dividend date to receive the upcoming payment.
How much does LUV pay in dividends per year?
Southwest Airlines Co. paid $0.72 per share in annual dividends in 2025. The dividends are paid quarterly.
Has LUV been increasing its dividend?
Southwest Airlines Co. has grown its dividend at a 5-year CAGR of 31.95% and a 10-year CAGR of 9.71%.
Is LUV's dividend safe?
Southwest Airlines Co. has a payout ratio of 48.00%. Its free cash flow payout ratio is 96.01%. A payout ratio below 60% is generally considered sustainable.
How is LUV's Dividend Safety Rating calculated?
The Dividend Safety Rating evaluates Southwest Airlines Co.'s dividend sustainability across four categories: Payout & Coverage (30%), Balance Sheet (20%), Profitability (20%), and Dividend Track Record (30%). Each metric is rated from "Very Safe" to "Danger" based on industry-standard thresholds, with sector-specific adjustments for industrials companies. The overall score ranges from 0 to 100.

Want to understand how we rate dividend safety? Read our full methodology

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This page is not investment advice. The content is for informational purposes only and should not be construed as a recommendation to buy, sell, or hold any security. Always do your own research and consult a qualified financial advisor before making investment decisions.

Financial data, including dividend history, earnings, balance sheet metrics, and the Dividend Safety Rating, is provided for informational purposes only. Data may be delayed or differ from official filings. Past performance does not guarantee future results. Always verify with official sources before making investment decisions.

Market data provided by Twelve Data.