The Motley Fool

Why is the Qantas share price hitting new all-time highs?

The Qantas Airways Limited (ASX: QAN) share price opened higher this morning, hitting a new all-time high just after market open, making today the second consecutive day the airliner has reached record highs. The Qantas share price has since pulled back slightly to $6.78 at time of writing.

Why is the Qantas share price climbing higher?

The Qantas share price has only climbed 17.36% higher so far this year. While that looks good as a standalone performance, the S&P/ASX 200 Index (INDEXASX: XJO) has gained 21.70% over the same period.

So, what’s driving the movement in Qantas shares and why did they hit a new record high of $6.84 per share this morning?

On Monday, the company announced a plan to become net carbon neutral by 2050. Qantas is looking to slash emissions by way of a $50 million investment over 10 years. Shareholders were boosted by the news as the Qantas share price rocketed to a new all-time high.

Qantas said it will double the number of flights being carbon offset with a cap on net emissions starting next year. The airline is looking to exceed its targets set as part of an aviation industry movement to cut down on CO2 emissions.

The big question you may be wondering is, “what about the fuel?”, and it’s a fair point. Aeroplanes burn a lot of jet fuel but Qantas is looking to move towards more fuel-efficient aircraft going forward.

The B787 Dreamliners burn 20% less fuel than aircraft of a similar size while Jetstar’s A321neo (LR) aircraft use 15% less than the aircrafts that they are replacing.

Should you buy Qantas shares in 2020?

While the Qantas share price has underperformed the benchmark ASX 200 index in 2019, it is still surging higher. Qantas shares are currently trading at 12.49x earnings with a tidy 3.67% dividend yield to boot.

In contrast, Virgin Australia Holdings Ltd (ASX: VAH) shares have had a difficult time in 2019. The Virgin share price is down 21.05% in 2019 as earnings continue to slide for the group.

If you’re looking for exposure to the aviation industry, then Qantas could be a good value, blue-chip ASX dividend stock for your portfolio in 2020.

Other top ASX dividend stocks you might want to check out are below!

Top 3 Dividend Shares To Buy For 2020

When Edward Vesely -- our resident dividend expert -- has a stock tip, it can pay to listen. With huge winners like Dicker Data (up 147%) and Collins Food (up 105%) under his belt, Edward is building an enviable following amongst investors that are planning for retirement.

In a brand new report, Edward has just revealed what he believes are the 3 best dividend stocks for income-hungry investors to buy now. All 3 stocks are paying growing fully franked dividends giving you the opportunity to combine capital appreciation with attractive dividend yields.

Best of all, Edward’s “Top 3 Dividend Shares To Buy For 2020” report is totally free to all Motley Fool readers.

Click here now to access this free report.

Motley Fool contributor Kenneth Hall has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

NEW. Five Cheap and Good Stocks to Buy in 2019…

Our Motley Fool experts have just released a brand new FREE report, detailing 5 dirt cheap shares that you can buy today.

One stock is an Australian internet darling with a rock solid reputation and an exciting new business line that promises years (or even decades) of growth… while trading at an ultra-low price…

Another is a diversified conglomerate trading near a 52-week low all while offering a 2.8% fully franked yield…

Plus 3 more cheap bets that could position you to profit over the next 12 months!

See for yourself now. Simply click the link below to scoop up your FREE copy and discover all 5 shares. But you will want to hurry – this free report is available for a brief time only.

CLICK HERE FOR YOUR FREE REPORT!