Southwest Airlines dividend: payout and coverage
MyStockButler's October 2026 analysis: Southwest Airlines most recently declared a dividend of $0.18 per share; the forecast's base case keeps it at $0.72 per share in each period. Its 2025 free cash flow was negative $831 million, while dividends and buybacks exceeded free cash flow.
How much does Southwest Airlines pay in dividends?
The base dividend stays at $0.72 per share in each period. The bear case holds $0.72 initially, then cuts to $0.36 and $0.18. The bull case holds $0.72 before rising to $0.80 and $0.88. The latest quarterly declaration was $0.18, but 2025 free cash flow was negative $831 million and aircraft commitments reached $14.8 billion.
How much would Southwest Airlines's dividend pay you?
$10,000 invested in Southwest Airlines at its 1.8% dividend yield (our report of October 22, 2026) pays $180.00 in the first year, before tax. If its dividend stays flat and the dividends are reinvested, year 10 pays $211.35, with $1,953.02 received in all.
Before tax. Past dividend growth is not a promise. Information only, not investment advice.
Does Southwest Airlines cover its dividend with cash?
Free cash flow is the money left after operating cash pays for long-term investment. Southwest generated $1.811 billion of it in 2021, but negative $831 million in 2025. In 2025, operations produced $1.842 billion while capital expenditures reached $2.673 billion, largely because of aircraft deliveries. Newer MAX aircraft improved fuel efficiency by 2.7%, a real operating benefit, though not proof that the entire fleet investment earned a sufficient return.
Southwest paid $2.550 billion for share buybacks and $399 million in dividends in 2025. Together, those distributions exceeded free cash flow by $3.780 billion. The airline then spent another $1.250 billion on repurchases in the first quarter of 2026. Buying fewer shares can raise earnings per share, but it does not raise the airline’s total operating earnings.
| 2025 | 2024 | 2023 | 2022 | 2021 | |
|---|---|---|---|---|---|
| Free cash flow | -831 | -1,618 | -389 | -156 | 1,811 |
| − Dividends paid | 399 | 430 | 428 | 0 | 0 |
| − Share buybacks | 2,550 | 250 | 0 | 0 | 0 |
| = Free cash flow not paid out | 1,811 | ||||
| = Paid out more than the free cash flow | 3,780 | 2,298 | 817 | 156 | |
| Paid out, % of free cash flow | not meaningful | not meaningful | not meaningful | not meaningful | 0.0% |
What could change the Southwest Airlines dividend?
Higher fuel costs or softer bookings during 2027 would reduce revenue growth and margins, pushing the forecast toward the bear case. Longer turns and retrofit costs through 2028 would keep CASM-X elevated, while aircraft spending through 2029 could weaken free cash flow and restrict buybacks.
| October 2027 | October 2028 | October 2029 | |
|---|---|---|---|
| Normal operating profit | 850 (-315 / 1,225) | 1,050 (325 / 1,665) | 1,170 (503 / 1,950) |
| Shares (millions) | 490 (490 / 488) | 490 (492 / 486) | 490 (494 / 484) |
| Dividends per share | 0.72 (0.72 / 0.72) | 0.72 (0.36 / 0.80) | 0.72 (0.18 / 0.88) |
| Enterprise value to normal operating profit | 25.60 (67.00 / 17.80) | 20.70 (43.50 / 13.10) | 18.60 (28.50 / 11.20) |
| Net debt | 3,185 (4,570 / 2,702) | 3,871 (5,891 / 2,721) | 4,382 (6,811 / 2,520) |
What is Southwest Airlines dividend yield today?
The table shows the share price, valuation measures, cash yields and dividend yield at the current date.
| Today (Oct 22, 2026) | |
|---|---|
| Share price | 39.88 |
| Dividend yield (calculated) | 1.8% |
What this means. The negative free cash flow yields mean the company spent more cash than it generated in the latest year, so it did not produce positive cash to support its stock market value.