Shares of American Airlines Group Inc. (AAL) will begin trading ex-dividend on Wednesday, August 3. To qualify for a dividend check, investors must have owned American Airlines shares prior to Wednesday, which is the last day the company's management will finalize its roster of shareholders to whom it will mail dividend payments.
American Airlines shares closed Tuesday at $33.51, down 5.87%. Based on Tuesday's closing price, the company's 10-cent per share quarterly dividend yields 1.12% annually, or about 88 basis points below the 2.00% average yield of the S&P 500 (SPX) index. American Airlines will send its dividend payment on August 19 to shareholders of record as of August 5. The stock has a consensus buy rating and an average analyst 12-month price target of $41, implying a rise of 22% from current levels. (See also: American Airlines Flies Higher on Q2 Beat.)
Last month, the world's largest airline reported adjusted earnings of $1.77 per share, which beat consensus estimates of $1.68 per share. One-time costs, mostly related to its 2013 merger with US Airways, impacted its net earnings. Second quarter revenue reached $10.36 billion, declining 4.3% year-over-year, but enough to beat estimates by about $40 million.
American Airlines was able to beat revenue estimates despite a more than 6% fall in its revenue for every seat flown one mile, a closely-watched metric in the airline industry. The decline means American Airlines is collecting lower fares on average. (See also: A Look at the Shrinking U.S. Airline Industry.)
The company is adjusting to an industry where airliners are competing for passengers as there are more seats available across the industry than demand, which forces airliners to cut prices. And it would seem that negatively impacted the company's revenue during the quarter.
American Airlines shares have declined 21% year-to-date, including 16% over the past twelve months, compared with a 5.53% year-to-date rise in the S&P 500 index (SPX).