Return on Retained Earnings (RORE) is an indicator of a company's growth potential, it shows how much a company earns by reinvesting its retained earnings, i.e. profits after dividend payments.
Southwest Airlines Co's 3-Year RORE % for the quarter that ended in Mar. 2026 was 96.75%.
The industry rank for Southwest Airlines Co's 3-Year RORE % or its related term are showing as below:
FRA:SWN's 3-Year RORE % is ranked better than 92.71% of 933
companies
in the Transportation industry
Industry Median: 4.38
vs FRA:SWN: 96.75
Southwest Airlines Co (FRA:SWN) 3-Year RORE % Explanation
Return on Retained Earnings (RORE) is important to investors because it reveals a company's efficiency and growth potential. A higher RORE indicates a higher return. A high RORE indicates that the company should reinvest profits into the business. A lower RORE suggests that the company should distribute profits to shareholders by paying out dividends, since those dollars aren't generating much additional growth for the company.
There are a several different ways to arrive at the Return on Retained Earnings. The simplest way to calculate it is by using published information on Earnings per Share (EPS) and Dividend per Share (DPS) over a selected period. Here, 3-year period is chosen.
Be Aware
Please keep in mind that the RORE is relative to the nature of the business and its competitors. If another company in the same sector is producing a lower return on retained earnings, it doesn’t necessarily mean it’s a bad investment. It may just suggest the company is older and no longer in a high growth stage. At such a stage in the business cycle, it would be expected to see a lower RORE and higher dividend payout.
Southwest Airlines Co 3-Year RORE % Related Terms
Southwest Airlines Co 3-Year RORE % Historical Data
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The historical data trend for Southwest Airlines Co's 3-Year RORE % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
FRA:SWN vs AAL, UAL, CPA: 3-Year RORE % Comparison
For the Airlines subindustry, Southwest Airlines Co's 3-Year RORE %, along with its competitors' market caps and 3-Year RORE % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Southwest Airlines Co 3-Year RORE % vs Transportation Industry
For the Transportation industry and Industrials sector, Southwest Airlines Co's 3-Year RORE % distribution charts can be found below:
* The bar in red indicates where Southwest Airlines Co's 3-Year RORE % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
In the calculation of 3-Year RORE %, the most recent and first period EPS (Diluted) is the trailing twelve months (TTM) data ended in Mar. 2026 and 3-year before.
Southwest Airlines Co (FRA:SWN) has a 3-Year RORE % of 96.75 as of Mar. 2026. 3-Year RORE % shows how much a company earns by reinvesting its retained earnings in 3-year. View historical data on Southwest Airlines Co and its competitors. According to the industry distribution chart, Southwest Airlines Co ranks #68 out of 933 companies in the Transportation industry, placing it in the top 7.3%.
Is Southwest Airlines Co's 3-Year RORE % too high?
Southwest Airlines Co's current 3-Year RORE % is 96.75. The Transportation industry median 3-Year RORE % is 4.38. Southwest Airlines Co's value of 96.75 is 2108.9% above this industry median. Based on the distribution chart, Southwest Airlines Co ranks #68 out of 933 companies in the Transportation industry, which is in the top quartile — a strong position relative to peers. Overall, Southwest Airlines Co has a GF Score™ of 81/100 and is considered Modestly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Southwest Airlines Co's 3-Year RORE % compare to AAL and UAL?
According to the Transportation industry distribution chart, Southwest Airlines Co ranks #68 out of 933 companies for 3-Year RORE %. This places Southwest Airlines Co in the top 7% of its industry — outperforming the majority of peers. The industry median 3-Year RORE % is 4.38. Southwest Airlines Co's value of 96.75 is 2108.9% above this benchmark. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good 3-Year RORE % for a Transportation company?
The median 3-Year RORE % among Transportation companies is 4.38, based on 933 companies in the industry. Companies in the top quartile (top 25%) have a 3-Year RORE % significantly above this median, while those in the bottom quartile fall well below. However, 3-Year RORE % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Southwest Airlines Co's current 3-Year RORE % of 96.75 is 2108.9% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high 3-Year RORE % mean?
A high 3-Year RORE % can signal that a stock is expensive relative to its fundamentals. 3-Year RORE % shows how much a company earns by reinvesting its retained earnings in 3-year. View historical data on Southwest Airlines Co and its competitors. For the Transportation industry, the median 3-Year RORE % is 4.38 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Southwest Airlines Co's current 3-Year RORE % is 96.75. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Southwest Airlines Co stock overvalued right now?
Based on GuruFocus' analysis, Southwest Airlines Co (FRA:SWN) is currently considered Modestly Overvalued. The stock's GF Value™ is €36.32, compared to a current price of €44.96 — trading 23.8% above its estimated fair value. The current 3-Year RORE % is 96.75 and 2108.9% above the Transportation industry median of 4.38. Southwest Airlines Co's overall GF Score™ is 81/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is 3-Year RORE % calculated?
3-Year RORE % is calculated from a company's financial statements. For Southwest Airlines Co (FRA:SWN), the current 3-Year RORE % is 96.75 as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Southwest Airlines Co (FRA:SWN) Overvalued in 2026?
Based on GuruFocus' analysis, Southwest Airlines Co stock appears to be overvalued.
The current stock price of €44.96 is trading 23.8% above its estimated GF Value™ of €36.32.
GuruFocus considers Southwest Airlines Co to be Modestly Overvalued.
Key valuation signals for FRA:SWN:
3-Year RORE %: 96.75
GF Value™: €36.32 vs. price of €44.96 (23.8% above fair value)
Industry Position: 2108.9% above the Transportation median (#68 of 933)
No single metric tells the full story. See the FRA:SWN stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Southwest Airlines is the largest domestic air carrier in the United States by passengers boarded. Southwest operates nearly 800 aircraft in an all-Boeing 737 fleet. Despite offering some longer routes and a few perks for business travelers, the airline predominantly specializes in short-haul, leisure flights operated with a simple cabin configuration in a point-to-point network. In early 2026, Southwest modified its cabins to offer some rows with extra legroom, its ticketing process and merchandising to offer assigned seats, and more fare categories to include a basic economy class that appears for the first time in travel aggregators' search results and more directly competes with other airlines' offerings.
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