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WestJet
WestJet

Research Report

Clear skies for WestJet stock Add to ...

Validea’s pick of the week provides a detailed report on a company that scores well in the stock-screening service’s model portfolios. On Validea.ca, investors can analyze 1,000 Canadian stocks through 12 different guru-based models and get individual reports on each company. Globe Investor has a distribution agreement with Validea.ca. Try it.

Calgary-based WestJet Airlines offers scheduled service to 87 destinations in North America, Central America and the Caribbean. Earlier this year, WestJet launched a new regional airline, WestJet Encore. It has a $3.3-billion market cap.

WestJet has grown earnings at a 15-per-cent pace over long term and sales at a 10-per-cent pace (using averages of 3, 4, & 5 year EPS/sales growth rates).

Its 12.3 trailing 12 month P/E, 1.6-per-cent dividend, and 15-per-cent growth rate make for solid 0.75 yield adjusted P/E-to-growth ratio, part of why Peter Lynch model has strong interest.

WestJet's strong 86 relative strength over past year shows good momentum. It has 16.2-per-cent free cash flow yield and a reasonable 47-per-cent debt/equity ratio.

Its 17.1-per-cent return on capital and 15.4-per-cent earnings yield earn it some interest from the Joel Greenblatt model.

The Warren Buffett model likes WestJet's 15.8-per-cent return on retained earnings over past decade.


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