Saturday, September 07, 2013 3:48 pm
Delta to join S&P 500 index of stocks
By DAVID KOENIGAP Business Writer
The S&P index is made up of 500 large U.S. companies whose shares trade on either the New York Stock Exchange or the Nasdaq Stock Market. Companies can benefit from being in the index because investment funds that track the index must buy their stock.
Atlanta-based Delta, the world's second-biggest airline by passenger traffic behind United, will join the index after trading ends Tuesday. It will replace BMC Software Inc., which is being bought by Bain Capital.
Southwest Airlines Co. is the only carrier now in the S&P index.
Delta cut costs in a 2005-2007 bankruptcy reorganization, then grew by acquiring Northwest Airlines in 2008. It's reduced debt and posted profits for three straight years, and its shares have gained 68 percent this year. Delta's stock market value is nearly $17 billion.
The airline announced in May that it would resume issuing a quarterly dividend of 6 cents a share, due to be paid Tuesday. It last paid a dividend in 2003. The airline also plans to buy back $500 million of its own shares by mid-2016.
Jamie Baker, an analyst for J.P. Morgan, said Delta's listing in the S&P 500 index could increase demand for the company's stock, which he rates "neutral."