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Here's Why Old Dominion (ODFL) Should Grace Your Portfolio
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Old Dominion Freight Line (ODFL - Free Report) is benefiting from strong performance of the LTL (Less-Than-Truckload) segment, thanks to strong freight market conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis. During the same period, LTL shipments and LTL revenue per shipment increased by 18.5% and 10.2%, respectively.
Old Dominion recently announced plans to open eight to 10 service centers in 2022 to cater to the buoyant demand scenario. The capacity enhancements include additional doors and staff, as well as technology upgrades (real-time track and traceability) to support growth and cater to the increased customer demand.
Thanks to strong freight demand, the top-line (up 30.9% year over year in 2021) picture is getting rosier. Despite higher costs (up 24.3% year over year in 2021), increases in revenues are leading to an improvement in ODFL’s operating ratio (operating expenses as percentage of revenues), a key measure of efficiency. The metric improved to 73.5% in 2021 from 77.4% in 2020. Lower the value of the metric, the better.
Old Dominion Freight Line, Inc. Price and Consensus
Old Dominion’s measures to reward its shareholders through dividends and share buybacks are encouraging. The company returned $691.4 million to shareholders through $599 million in share repurchases and $92.4 million in cash dividends. In February, ODFL’s board approved a 50% hike in its quarterly dividend payout.
In light of the abovementioned positives, we believe the time is rife for investors to add the Old Dominion stock to their portfolios now, as is suggested by its Zacks Rank #2 (Buy).
ODFL is likely to see continued improvement in demand as freight market conditions remain strong. The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised upward by 8.8% in the past 60 days. The same for second-quarter earnings has been revised upward by 4.7% in the past 60 days.
Other Key Picks
Some other stocks within the broader Transportation sector that investrs can consider are as follows:
Textainer Group sports a Zacks Rank #1 (Strong Buy). The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 21.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Textainer Group have gained more than 28% in a year’s time.
Golar LNG Limited (GLNG - Free Report) also carries a Zacks Rank #1. The company’s earnings have outperformed the Zacks Consensus Estimate in three of the past four quarters, while missing in one. The average beat was 49.8%.
Shares of Golar LNG have rallied more than 100% in a year’s time.
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Here's Why Old Dominion (ODFL) Should Grace Your Portfolio
Old Dominion Freight Line (ODFL - Free Report) is benefiting from strong performance of the LTL (Less-Than-Truckload) segment, thanks to strong freight market conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis. During the same period, LTL shipments and LTL revenue per shipment increased by 18.5% and 10.2%, respectively.
Old Dominion recently announced plans to open eight to 10 service centers in 2022 to cater to the buoyant demand scenario. The capacity enhancements include additional doors and staff, as well as technology upgrades (real-time track and traceability) to support growth and cater to the increased customer demand.
Thanks to strong freight demand, the top-line (up 30.9% year over year in 2021) picture is getting rosier. Despite higher costs (up 24.3% year over year in 2021), increases in revenues are leading to an improvement in ODFL’s operating ratio (operating expenses as percentage of revenues), a key measure of efficiency. The metric improved to 73.5% in 2021 from 77.4% in 2020. Lower the value of the metric, the better.
Old Dominion Freight Line, Inc. Price and Consensus
Old Dominion Freight Line, Inc. price-consensus-chart | Old Dominion Freight Line, Inc. Quote
Old Dominion’s measures to reward its shareholders through dividends and share buybacks are encouraging. The company returned $691.4 million to shareholders through $599 million in share repurchases and $92.4 million in cash dividends. In February, ODFL’s board approved a 50% hike in its quarterly dividend payout.
In light of the abovementioned positives, we believe the time is rife for investors to add the Old Dominion stock to their portfolios now, as is suggested by its Zacks Rank #2 (Buy).
ODFL is likely to see continued improvement in demand as freight market conditions remain strong. The Zacks Consensus Estimate for the company’s first-quarter earnings has been revised upward by 8.8% in the past 60 days. The same for second-quarter earnings has been revised upward by 4.7% in the past 60 days.
Other Key Picks
Some other stocks within the broader Transportation sector that investrs can consider are as follows:
Textainer Group sports a Zacks Rank #1 (Strong Buy). The company has a stellar earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the trailing four quarters, the average beat being 21.6%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Textainer Group have gained more than 28% in a year’s time.
Golar LNG Limited (GLNG - Free Report) also carries a Zacks Rank #1. The company’s earnings have outperformed the Zacks Consensus Estimate in three of the past four quarters, while missing in one. The average beat was 49.8%.
Shares of Golar LNG have rallied more than 100% in a year’s time.