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3 Transportation Stocks to Own on Rising Dividend Payouts
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Stocks belonging to the transportation cohort are benefiting from the gradual uptick in trading volumes with economic activities gaining pace. The widespread vaccination programs also boosted this ramp-up in economic affairs. The gradually improving scenario can be gauged from the impressive results of most sector participants for fourth-quarter 2021 despite challenges like the omicron-induced labor crunch.
In fact, the year 2021 was good for the sector participants with improvements in key areas like the freight scenario. The betterment in the scenario saw a huge proportion of transportation players reporting better-than-expected earnings per share for the final quarter of 2021. Evidently, the Zacks Transportation sector gained 9% last year.
Image Source: Zacks Investment Research
However, headwinds like increasing fuel costs, geopolitical issues led by the war between Russia and Ukraine and supply-chain woes have induced the sector to lose 3.9% year to date. In fact, the price of oil touched $100 after seven years late last week. With fuel expenses being integral to all transportation players, this steep hike in oil price does not bode well for bottom-line growth of sector participants.
Also, mounting inflation has rocked the U.S. stock markets so far this year. With the possibility of the central bank raising the interest rate in March, the market is likely to witness more volatility in the near term.
Is Investing in Dividend Growth Stocks the Way Out?
In view of the above-mentioned disruptions, the question is whether investors interested in the transportation sector should shun the stocks in the sector altogether. The answer is a categorical no. In this era of uncertainty, investing in dividend growth stocks is logical. After all, these stocks boast solid fundamentals and are unfazed by any market gyrations.
As investors prefer an income-generating stock, a high dividend-yielding one is much coveted. Needless to say, they are always on the lookout for companies with a consistent and incremental dividend history.
Below we present three transportation stocks that announced dividend hikes this year, even in these turbulent times, thereby highlighting their financial prosperity. The stocks also carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GATX Corporation (GATX - Free Report) : Based in Chicago, IL, GATX, currently sporting a Zacks Rank #1, is a global railcar lessor with owned fleets in North America, Europe and Asia. Continued recovery in the North American railcar leasing market is expected to drive the stock’s growth in 2022. Improved market lease rates and higher asset disposition gains are anticipated to boost profits at the Rail North America segment, contributing to the majority of GATX’s top line. The Zacks Consensus Estimate for 2022 earnings per share has been revised 5.9% upward over the past 60 days.
In January, GATX announced a 4% hike in its quarterly dividend payout, taking the total to 52 cents per share (annualized $2.08). The first installment of the revised dividend will be paid out on Mar 31, 2022, to its shareholders as of Feb 22. The current year marks the 104th consecutive year of GATX paying out dividends.
Arkansas-based J.B. Hunt Transport Services (JBHT - Free Report) provides a broad range of transportation services to a diverse group of customers through the United States, Canada and Mexico. J.B. Hunt is benefiting from strong performances of its Dedicated Contract Services (DCS), Truckload and Final Mile Services (FMS) segments. The DCS unit is being aided by an improved fleet productivity and a rise in average revenue producing trucks, while the truckload unit is gaining from higher load count and revenue per load. Rapid expansion of JBHT’s Final Mile network (delivery of goods to customer’s doorstep) through strategic acquisitions and organic growth is encouraging too.
In January, JBHT, currently flaunting a Zacks Rank of 1, hiked its dividend 33% to 40 cents per share (annually: $1.60). J.B. Hunt raised its dividend twice last year, highlighting its shareholder-friendly approach. The JBHT stock has witnessed the Zacks Consensus Estimate for current-year earnings being revised 6.7% upward over the past 60 days.
Schneider National (SNDR - Free Report) , headquartered in Green Bay, WI, is a leading transportation and logistics services company. SNDR is being aided by a strong performance in its Intermodal and Logistics units. The Intermodal segment is benefiting from yield management and increased volumes. The Logistics unit is thriving on the back of favorable market conditions and other factors.
In January, SNDR, currently holding a Zacks Rank #2, hiked its dividend 14.3% on its Class A and Class B common stock to 8 cents per share (annually: 32 cents). The hiked dividend is payable Apr 8, 2022, to its shareholders of record as of Mar 11, 2022. The SNDR stock has witnessed the Zacks Consensus Estimate for current-year earnings being revised 10.6% upward over the past 60 days.
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3 Transportation Stocks to Own on Rising Dividend Payouts
Stocks belonging to the transportation cohort are benefiting from the gradual uptick in trading volumes with economic activities gaining pace. The widespread vaccination programs also boosted this ramp-up in economic affairs. The gradually improving scenario can be gauged from the impressive results of most sector participants for fourth-quarter 2021 despite challenges like the omicron-induced labor crunch.
In fact, the year 2021 was good for the sector participants with improvements in key areas like the freight scenario. The betterment in the scenario saw a huge proportion of transportation players reporting better-than-expected earnings per share for the final quarter of 2021. Evidently, the Zacks Transportation sector gained 9% last year.
Image Source: Zacks Investment Research
However, headwinds like increasing fuel costs, geopolitical issues led by the war between Russia and Ukraine and supply-chain woes have induced the sector to lose 3.9% year to date. In fact, the price of oil touched $100 after seven years late last week. With fuel expenses being integral to all transportation players, this steep hike in oil price does not bode well for bottom-line growth of sector participants.
Also, mounting inflation has rocked the U.S. stock markets so far this year. With the possibility of the central bank raising the interest rate in March, the market is likely to witness more volatility in the near term.
Is Investing in Dividend Growth Stocks the Way Out?
In view of the above-mentioned disruptions, the question is whether investors interested in the transportation sector should shun the stocks in the sector altogether. The answer is a categorical no. In this era of uncertainty, investing in dividend growth stocks is logical. After all, these stocks boast solid fundamentals and are unfazed by any market gyrations.
As investors prefer an income-generating stock, a high dividend-yielding one is much coveted. Needless to say, they are always on the lookout for companies with a consistent and incremental dividend history.
Below we present three transportation stocks that announced dividend hikes this year, even in these turbulent times, thereby highlighting their financial prosperity. The stocks also carry a Zacks Rank #1 (Strong Buy) or 2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
GATX Corporation (GATX - Free Report) : Based in Chicago, IL, GATX, currently sporting a Zacks Rank #1, is a global railcar lessor with owned fleets in North America, Europe and Asia. Continued recovery in the North American railcar leasing market is expected to drive the stock’s growth in 2022. Improved market lease rates and higher asset disposition gains are anticipated to boost profits at the Rail North America segment, contributing to the majority of GATX’s top line. The Zacks Consensus Estimate for 2022 earnings per share has been revised 5.9% upward over the past 60 days.
In January, GATX announced a 4% hike in its quarterly dividend payout, taking the total to 52 cents per share (annualized $2.08). The first installment of the revised dividend will be paid out on Mar 31, 2022, to its shareholders as of Feb 22. The current year marks the 104th consecutive year of GATX paying out dividends.
Arkansas-based J.B. Hunt Transport Services (JBHT - Free Report) provides a broad range of transportation services to a diverse group of customers through the United States, Canada and Mexico. J.B. Hunt is benefiting from strong performances of its Dedicated Contract Services (DCS), Truckload and Final Mile Services (FMS) segments. The DCS unit is being aided by an improved fleet productivity and a rise in average revenue producing trucks, while the truckload unit is gaining from higher load count and revenue per load. Rapid expansion of JBHT’s Final Mile network (delivery of goods to customer’s doorstep) through strategic acquisitions and organic growth is encouraging too.
In January, JBHT, currently flaunting a Zacks Rank of 1, hiked its dividend 33% to 40 cents per share (annually: $1.60). J.B. Hunt raised its dividend twice last year, highlighting its shareholder-friendly approach. The JBHT stock has witnessed the Zacks Consensus Estimate for current-year earnings being revised 6.7% upward over the past 60 days.
Schneider National (SNDR - Free Report) , headquartered in Green Bay, WI, is a leading transportation and logistics services company. SNDR is being aided by a strong performance in its Intermodal and Logistics units. The Intermodal segment is benefiting from yield management and increased volumes. The Logistics unit is thriving on the back of favorable market conditions and other factors.
In January, SNDR, currently holding a Zacks Rank #2, hiked its dividend 14.3% on its Class A and Class B common stock to 8 cents per share (annually: 32 cents). The hiked dividend is payable Apr 8, 2022, to its shareholders of record as of Mar 11, 2022. The SNDR stock has witnessed the Zacks Consensus Estimate for current-year earnings being revised 10.6% upward over the past 60 days.