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Here's Why Investors Should Retain Air Lease (AL) Stock Now
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Air Lease Corporation (AL - Free Report) is benefiting from its steady fleet growth and investor-friendly steps. However, low liquidity is a headwind.
Factors Favoring AL
Steady growth in fleet is driving Air Lease’s top line (up 11% year over year in 2022). The company purchased 60 new aircraft in 2022. As of Dec 31, 2022, Air Lease’s fleet included 417 owned and 85 managed aircraft.
AL had commitments to purchase 398 aircraft from Boeing and Airbus for delivery through 2029, as of the same date. The estimated aggregate of the commitment is $25.5 billion.
We are impressed by Air Lease’s endeavors to reward its shareholders.The company has an impressive dividend payment history. In November 2022, the company’s board approved a dividend hike of approximately 8.1% to 20 cents per share (annually: 80 cents). This marked the company’s 10th dividend increase since February 2013, when it began distributing dividends. The company is also active on the buyback front.
Key Risk
Air Lease’s liquidity position is a concern. The current ratio (a measure of liquidity) at the end of 2022 was 1.12, well below of 1.81 at 2021 end. A decline in current ratio implies a reduction in the ability to generate cash.
American Airlines, currently carrying a Zacks Rank #2 (Buy), is benefiting from the improved air-travel-demand situation. In the fourth quarter of 2022, AAL reported earnings of $1.17 per share, surpassing the Zacks Consensus Estimate by 2.63%.
For first-quarter and full-year 2023, AAL’s earnings are expected to register 100.4% and 332% growth, respectively, on a year-over-year basis.
GATX Corporation carries a Zacks Rank #2 at present. The gradual improvement in the North American railcar leasing market is a huge positive for GATX. Management expects recovery in the North American railcar leasing market to continue in 2023.
For full-year 2023, GATX’s earnings are expected to register 10.5% growth on a year-over-year basis.
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Here's Why Investors Should Retain Air Lease (AL) Stock Now
Air Lease Corporation (AL - Free Report) is benefiting from its steady fleet growth and investor-friendly steps. However, low liquidity is a headwind.
Factors Favoring AL
Steady growth in fleet is driving Air Lease’s top line (up 11% year over year in 2022). The company purchased 60 new aircraft in 2022. As of Dec 31, 2022, Air Lease’s fleet included 417 owned and 85 managed aircraft.
AL had commitments to purchase 398 aircraft from Boeing and Airbus for delivery through 2029, as of the same date. The estimated aggregate of the commitment is $25.5 billion.
We are impressed by Air Lease’s endeavors to reward its shareholders.The company has an impressive dividend payment history. In November 2022, the company’s board approved a dividend hike of approximately 8.1% to 20 cents per share (annually: 80 cents). This marked the company’s 10th dividend increase since February 2013, when it began distributing dividends. The company is also active on the buyback front.
Key Risk
Air Lease’s liquidity position is a concern. The current ratio (a measure of liquidity) at the end of 2022 was 1.12, well below of 1.81 at 2021 end. A decline in current ratio implies a reduction in the ability to generate cash.
Zacks Rank & Key Picks
Air Lease currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some better-ranked stocks in the Zacks Transportation sector are American Airlines (AAL - Free Report) and GATX Corporation (GATX - Free Report) ).
American Airlines, currently carrying a Zacks Rank #2 (Buy), is benefiting from the improved air-travel-demand situation. In the fourth quarter of 2022, AAL reported earnings of $1.17 per share, surpassing the Zacks Consensus Estimate by 2.63%.
For first-quarter and full-year 2023, AAL’s earnings are expected to register 100.4% and 332% growth, respectively, on a year-over-year basis.
GATX Corporation carries a Zacks Rank #2 at present. The gradual improvement in the North American railcar leasing market is a huge positive for GATX. Management expects recovery in the North American railcar leasing market to continue in 2023.
For full-year 2023, GATX’s earnings are expected to register 10.5% growth on a year-over-year basis.