EZJ - EasyJet

[DividendDragon]

Hi everybody,

Just wanted to post an update on a stock I'm currently looking at.

EZJ - EasyJet Plc is a budget airline that has expanded rapidly over the last 5years.

At a 2.78% current yield it doesn't look that attractive considering they only started to pay a dividend in 2011. Saying this, they have aggressively raised dividends to 0.45gbp from only 0.11gbp over the space of 4years.

Current consensus is that the total payout for 2015 will be 35% larger than that of 2014 at 0.55gbp. EPS are forecast to grow 42%. It's worth noting that EZJ have beaten estimates in recent years.

It has a good/decent debt/equity ratio at 0.26.

Forward payout ratio is at 44%.

Worries:

Airlines are notoriously targeted by terrorists and any attack would cripple the share price. It's also a very competitive industry.

NOTE: I've just scratched the surface on my current research (as I currently have exams) but just want to collect opinion on the stock.

Regards
Lewys

[EricL]

Don't know anything about the company but one thing to consider with good profits now is that oil prices are at very low levels, which helps the airlines immensely.

Again, don't know the situation with EZJ and whether or not that affects them, just something to think about in your D.D.

[Roadmap2Retire]

Airlines are something that I have stayed away from for the most part. Investors like Buffett and others have hated and do not recommend airline companies. I cant remember who said it, but there was a quote about the airlines industry that (I am paraphrasing) "its hard to get labor concessions in bad times, and the unions have a tendency to push for greater profit in good times".

Having said that, I think airlines are good for traders who bank on the quick swings - esp when coupled with rise/drop of oil prices. For long term DGIs, Im not so sure.

[rapidacid]

Lewys, check out CPA for an airline ... they've ranked very, very highly in my screens for a while now ... I haven't pulled the trigger yet as there's some recent repatriation issues ... worth a look IMO

[rapidacid]

CPA just crushed

Copa Holdings (NYSE:CPA): Q4 EPS of $2.83 beats by $0.80.

Revenue of $670.92M (-3.8% Y/Y) beats by $15.72M.

[crimsonghost747]

Without having any deeper knowledge of the company:
If you look at the past years chart, you can see that the price has dramatically increased since August. Surprise surprise, that's also the same time that oil started to get cheaper. Now this is just my personal opinion, but there is no way that oil will stay at these prices for longer than 6 months. I'm horrible with time frames but the current price just isn't profitable for a lot of the oil producers in the long run.

So ask yourself this, if the price of the stock jumped around 40% when oil dived, what will happen when oil bounces back up?
On top of that there are other worries such as extremely tough competition.
And the fact that I've flown with EasyJet once in my life and out of the tens of airlines that I've used it's one of the two that I would never ever recommend to anyone. The other is Ethiopian Air... so that should give you some sort of an idea of how amazing I think they were.