Air Lease Corp. (NYSE: $AL) is a small-cap stock whose share price is taking flight.
The company, headquartered in Los Angeles, California, was founded in 2010 and is relatively new to the commercial aviation industry.
However, Air Lease has quickly found a niche for itself purchasing new commercial aircraft from Boeing (NYSE: $BA) and Airbus (Air) and then leasing them to airlines around the world.
It’s a straightforward business that has taken off. Air Lease says it now leases commercial planes to more than 90 airlines across 55 countries in every major region of the world.
Air Lease requires the airlines to pay all the maintenance, insurance, taxes, and other operating expenses during the term of the lease, keeping the costs to it at a minimum.
For major airlines such as Delta (NYSE: $DAL) and United (NASDAQ: $UAL), among others, the leasing gives them access to newer aircraft while they wait years for their own deliveries from Boeing and Airbus.
The win-win business model has led to strong financial results from Air Lease, pushing its stock to new heights.
Over the last 12 months, AL stock has risen 45% to trade at $63.65 U.S. per share. However, Air Lease’s market capitalization is small at $7.11 billion U.S.
The stock also trades at a forward price-earnings ratio of only 7.73 and offers shareholders a quarterly dividend payment of $0.22 U.S. per share for a yield of 1.38%.
Air Lease is in the process of being acquired by Japan’s Sumitomo Corp. (SSUMY), after which it is expected to continue trading publicly under the name Sumisho Air Lease.
With deliveries of new commercial aircraft getting pushed out further by Boeing and Airbus, Air Lease looks to be in an advantageous position moving forward.
