In a recent webcast with ETF Trends’ Tom Lydon, Frank Holmes explains that the airlines sector shows relatively cheap valuations compared to other transportation stocks as well as the general market. Whereas airline stocks have a 7 times prices-to-earnings (P/E) ratio, transportation stocks have one of 15 times and the S&P 500 Index as a whole has one of 17 times.
On top of this, airline stocks have demonstrated stronger dividend-yield growth than transportation stocks. For the year ended June, dividend yields in the Bloomberg U.S. Airlines Index grew 88.2 percent, while they grew 14.1 percent during the same period in the Dow Jones Transportation Index.
It’s for these reasons and more that make the U.S. Global Jets ETF (JETS) “attractive,” writes Tom.
Article summary written by U.S. Global Investors.
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