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Prospects of Zacks Transportation - Rail industry’s participants are being weighed down by challenges like inflation-induced elevated interest rates, concerns pertaining to supply-chain disruptions and the slowdown of economic growth. Most industry players are looking to drive their bottom line amid the headwinds through cost reduction.
Partly due to these headwinds, the industry, despite gaining 13.8% over the past year, has underperformed the S&P 500 Index’s 19.9% appreciation. The broader Zacks Transportation sector has increased 2.6% in the said time frame.
Despite the challenges surrounding the industry, some railroad companies like Union Pacific Corp., Canadian National Railway Co. and Norfolk Southern Corp. have consistently paid dividends to their shareholders, thus highlighting their pro-shareholder stance.
Dividend growth stocks generally belong to mature companies, which are less susceptible to significant market swings and act as a hedge against uncertainty-induced stock market volatility as is the case currently. They offer downside protection with their consistent increase in payouts.
Additionally, these companies generally have strong fundamentals like a sustainable business model, a long track of profitability, rising cash flows, good liquidity and a strong balance sheet.
How to Pick Stocks With Solid Dividend Payouts?
In order to choose some of the best dividend stocks from the aforementioned industry, we have run the Zacks Stock Screener to identify stocks with a dividend yield in excess of 2% and a sustainable dividend payout ratio of less than 60%. Each of the three stocks mentioned below presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Union Pacific: Headquartered in Omaha, NE, Union Pacific, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. Currently, UNP has a market capitalization of $152.07 billion.
UNP has paid dividends on its common stock for 125 consecutive years, reflecting its pro-shareholder approach. On July 17, 2024, UNP’s board of directorsapproved a dividend hike of 3%, thereby raising its quarterly cash dividend to $1.34 per share ($5.36 annualized) from $1.30 ($5.20 annualized). The raised dividend will be paid out on Sept. 30, 2024, to shareholders of record at the close of business on Aug. 30.
Union Pacific’s consistent initiatives to reward its shareholders through dividends and share repurchases look encouraging. In 2022, UNP paid dividends worth $3.16 billion and repurchased shares worth $6.28 billion. In 2023, the company returned $3.9 billion to its shareholders through dividends ($3.2 billion) and buybacks ($0.7 billion).
During the first half of 2024, UNP paid $1.59 billion in dividends and repurchased shares worth $100 million. Notably, management resumed buying back shares in second-quarter 2024. UNP expects to buyback shares worth $1.5 billion in 2024.
Canadian National: Based in Montreal, Canada, Canadian National is involved in the rail, intermodal, trucking, and marine transportation and logistics business in Canada and the United States. Currently, CNI has a market capitalization of $72.65 billion.
CNI pays out a quarterly dividend of $1.23 ($2.45 annualized) per share, which gives it a 2.12% yield at the current stock price. This company’s payout ratio is 46% of its earnings at present. The five-year dividend growth rate is 10.18%. (Check Canadian National’s dividend history here).
CNI’s efforts to reward its shareholders via dividends and buybacks are encouraging and highlight the company's financial strength. In 2022, CNI paid dividends of C$2 billion and repurchased shares worth C$4.71 billion. In 2023, CNI paid dividends of C$2.07 billion and repurchased shares worth C$4.55 billion. During the first six months of 2024, CNI paid dividends of C$1.07 billion and repurchased shares worth C$2.07 billion.
Norfolk Southern: Headquartered in Atlanta, GA, Norfolk Southern engages in the rail transportation of raw materials, intermediate products and finished goods in the United States. Currently, NSC has a market capitalization of $56.53 billion.
NSC pays out a quarterly dividend of $1.35 ($5.40 annualized) per share, which gives it a 2.16% yield at the current stock price. This company’s payout ratio is 49% of its earnings at present. The five-year dividend growth rate is 10.64%. (Check Norfolk Southern’s dividend history here).
Norfolk Southern's consistent initiatives to reward its shareholders look encouraging. During the first half of 2024, NSC paid dividends worth $610 million. In 2023, the company paid dividends worth $1.23 billion and repurchased and retired common stock worth $622 million. During 2022, Norfolk Southern paid dividends worth $1.17 billion and repurchased and retired common stock worth $3.11 billion.
Such shareholder-friendly moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business.
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Today you can access their live picks without cost or obligation.
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
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Zacks Industry Outlook Highlights Union Pacific, Canadian National Railway and Norfolk Southern
For Immediate Release
Chicago, IL – September 10, 2024 – Today, Zacks Equity Research discusses Union Pacific Corp. (UNP - Free Report) , Canadian National Railway Co. (CNI - Free Report) and Norfolk Southern Corp. (NSC - Free Report) .
Industry: Rail
Link: https://www.zacks.com/stock/news/2333618/3-dividend-paying-railroad-stocks-you-may-count-on
Prospects of Zacks Transportation - Rail industry’s participants are being weighed down by challenges like inflation-induced elevated interest rates, concerns pertaining to supply-chain disruptions and the slowdown of economic growth. Most industry players are looking to drive their bottom line amid the headwinds through cost reduction.
Partly due to these headwinds, the industry, despite gaining 13.8% over the past year, has underperformed the S&P 500 Index’s 19.9% appreciation. The broader Zacks Transportation sector has increased 2.6% in the said time frame.
Despite the challenges surrounding the industry, some railroad companies like Union Pacific Corp., Canadian National Railway Co. and Norfolk Southern Corp. have consistently paid dividends to their shareholders, thus highlighting their pro-shareholder stance.
Dividend growth stocks generally belong to mature companies, which are less susceptible to significant market swings and act as a hedge against uncertainty-induced stock market volatility as is the case currently. They offer downside protection with their consistent increase in payouts.
Additionally, these companies generally have strong fundamentals like a sustainable business model, a long track of profitability, rising cash flows, good liquidity and a strong balance sheet.
How to Pick Stocks With Solid Dividend Payouts?
In order to choose some of the best dividend stocks from the aforementioned industry, we have run the Zacks Stock Screener to identify stocks with a dividend yield in excess of 2% and a sustainable dividend payout ratio of less than 60%. Each of the three stocks mentioned below presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Union Pacific: Headquartered in Omaha, NE, Union Pacific, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. Currently, UNP has a market capitalization of $152.07 billion.
UNP has paid dividends on its common stock for 125 consecutive years, reflecting its pro-shareholder approach. On July 17, 2024, UNP’s board of directorsapproved a dividend hike of 3%, thereby raising its quarterly cash dividend to $1.34 per share ($5.36 annualized) from $1.30 ($5.20 annualized). The raised dividend will be paid out on Sept. 30, 2024, to shareholders of record at the close of business on Aug. 30.
The company’s payout ratio is 49% of its earnings at present. The five-year dividend growth rate is 8.85%. (Check Union Pacific’s dividend history here).
Union Pacific’s consistent initiatives to reward its shareholders through dividends and share repurchases look encouraging. In 2022, UNP paid dividends worth $3.16 billion and repurchased shares worth $6.28 billion. In 2023, the company returned $3.9 billion to its shareholders through dividends ($3.2 billion) and buybacks ($0.7 billion).
During the first half of 2024, UNP paid $1.59 billion in dividends and repurchased shares worth $100 million. Notably, management resumed buying back shares in second-quarter 2024. UNP expects to buyback shares worth $1.5 billion in 2024.
Union Pacific Corporation dividend-yield-ttm | Union Pacific Corporation Quote
Canadian National: Based in Montreal, Canada, Canadian National is involved in the rail, intermodal, trucking, and marine transportation and logistics business in Canada and the United States. Currently, CNI has a market capitalization of $72.65 billion.
CNI pays out a quarterly dividend of $1.23 ($2.45 annualized) per share, which gives it a 2.12% yield at the current stock price. This company’s payout ratio is 46% of its earnings at present. The five-year dividend growth rate is 10.18%. (Check Canadian National’s dividend history here).
CNI’s efforts to reward its shareholders via dividends and buybacks are encouraging and highlight the company's financial strength. In 2022, CNI paid dividends of C$2 billion and repurchased shares worth C$4.71 billion. In 2023, CNI paid dividends of C$2.07 billion and repurchased shares worth C$4.55 billion. During the first six months of 2024, CNI paid dividends of C$1.07 billion and repurchased shares worth C$2.07 billion.
Canadian National Railway Company dividend-yield-ttm | Canadian National Railway Company Quote
Norfolk Southern: Headquartered in Atlanta, GA, Norfolk Southern engages in the rail transportation of raw materials, intermediate products and finished goods in the United States. Currently, NSC has a market capitalization of $56.53 billion.
NSC pays out a quarterly dividend of $1.35 ($5.40 annualized) per share, which gives it a 2.16% yield at the current stock price. This company’s payout ratio is 49% of its earnings at present. The five-year dividend growth rate is 10.64%. (Check Norfolk Southern’s dividend history here).
Norfolk Southern's consistent initiatives to reward its shareholders look encouraging. During the first half of 2024, NSC paid dividends worth $610 million. In 2023, the company paid dividends worth $1.23 billion and repurchased and retired common stock worth $622 million. During 2022, Norfolk Southern paid dividends worth $1.17 billion and repurchased and retired common stock worth $3.11 billion.
Norfolk Southern Corporation dividend-yield-ttm | Norfolk Southern Corporation Quote
Such shareholder-friendly moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business.
Why Haven't You Looked at Zacks' Top Stocks?
Since 2000, our top stock-picking strategies have blown away the S&P's +7.0 average gain per year. Amazingly, they soared with average gains of +44.9%, +48.4% and +55.2% per year.
Today you can access their live picks without cost or obligation.
See Stocks Free >>
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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.