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Here's Why Investors Should Retain Werner Stock Right Now
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Werner Enterprises (WERN - Free Report) is benefiting from its robust tech-savvy initiatives to boost the company’s productivity. Shareholder-friendly initiatives bode well for the company. However, the company is grappling with a freight market downturn.
Factors Favoring WERN
Werner's investment in advanced fleet technology underscores its proactive approach to sustainability in the trucking industry. By utilizing fuel-efficient trucks with aerodynamic designs and testing innovative technologies like biodiesel blends and battery electric vehicles, the company reduces greenhouse gas emissions and improves fuel economy.
Moreover, its route optimization and advanced logistics technologies minimize fuel consumption and idle times, enhancing operational efficiency. Collaborative efforts with shippers, suppliers and industry organizations further promote sustainable logistics practices, reinforcing Werner's leadership in tackling environmental challenges while boosting productivity.
Werner Enterprises’ commitment to rewarding its shareholders through dividends and share repurchases is commendable. The company has a strong track record of paying dividends. In the third quarter of 2024, WERN declared a cash dividend of 14 cents per share and repurchased 1.6 million shares at an average price of $37.04 per share, totaling $60 million. As of June 30, 2024, Werner had 3.9 million shares remaining under its new repurchase authorization, which was approved in May 2024.
The company’s proactive initiatives to reduce operating expenses are boosting WERN’s bottom line, resulting in improved operational efficiency. In the second quarter of 2024, WERN’s operating expenses fell 5% year over year.
WERN: Key Risks to Watch
WERN's financial stability is being challenged by high operating expenses that are negatively affecting its bottom line. Increased labor and fuel expenses have pushed up operating costs. In the second quarter of 2024, labor costs, which encompass salaries and benefits, accounted for 35.1% of total operating expenses, amounting to $741.2 million. Meanwhile, fuel costs reached $72 million.
The freight market downturn does not bode well for the company’s prospects. As a result, the top line fell 6% year over year.
The ongoing driver crisis in the trucking industry is exacerbating supply chain challenges throughout the United States. This shortage of drivers is constraining trucking capacity, creating difficulties for companies like WERN. According to Bob Costello, chief economist for the American Trucking Associations, the industry could face a deficit of more than 160,000 drivers by 2030.
Shares of WERN have lost 8.2% over the past year against its industry’s growth of 0.9%.
Image Source: Zacks Investment Research
WERN’s Zacks Rank
WERN currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include Ryanair (RYAAY - Free Report) and Expeditors International of Washington (EXPD - Free Report) .
The company has a discouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average miss of 30%. Shares of RYAAY have risen 16.8% in the past year.
Expeditors carries a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 1% for the current year.
The company has a discouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missing thrice. The average miss is 2.7%. EXPD shares have gained 3.4% in the past year.
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Here's Why Investors Should Retain Werner Stock Right Now
Werner Enterprises (WERN - Free Report) is benefiting from its robust tech-savvy initiatives to boost the company’s productivity. Shareholder-friendly initiatives bode well for the company. However, the company is grappling with a freight market downturn.
Factors Favoring WERN
Werner's investment in advanced fleet technology underscores its proactive approach to sustainability in the trucking industry. By utilizing fuel-efficient trucks with aerodynamic designs and testing innovative technologies like biodiesel blends and battery electric vehicles, the company reduces greenhouse gas emissions and improves fuel economy.
Moreover, its route optimization and advanced logistics technologies minimize fuel consumption and idle times, enhancing operational efficiency. Collaborative efforts with shippers, suppliers and industry organizations further promote sustainable logistics practices, reinforcing Werner's leadership in tackling environmental challenges while boosting productivity.
Werner Enterprises’ commitment to rewarding its shareholders through dividends and share repurchases is commendable. The company has a strong track record of paying dividends. In the third quarter of 2024, WERN declared a cash dividend of 14 cents per share and repurchased 1.6 million shares at an average price of $37.04 per share, totaling $60 million. As of June 30, 2024, Werner had 3.9 million shares remaining under its new repurchase authorization, which was approved in May 2024.
The company’s proactive initiatives to reduce operating expenses are boosting WERN’s bottom line, resulting in improved operational efficiency. In the second quarter of 2024, WERN’s operating expenses fell 5% year over year.
WERN: Key Risks to Watch
WERN's financial stability is being challenged by high operating expenses that are negatively affecting its bottom line. Increased labor and fuel expenses have pushed up operating costs. In the second quarter of 2024, labor costs, which encompass salaries and benefits, accounted for 35.1% of total operating expenses, amounting to $741.2 million. Meanwhile, fuel costs reached $72 million.
The freight market downturn does not bode well for the company’s prospects. As a result, the top line fell 6% year over year.
The ongoing driver crisis in the trucking industry is exacerbating supply chain challenges throughout the United States. This shortage of drivers is constraining trucking capacity, creating difficulties for companies like WERN. According to Bob Costello, chief economist for the American Trucking Associations, the industry could face a deficit of more than 160,000 drivers by 2030.
Shares of WERN have lost 8.2% over the past year against its industry’s growth of 0.9%.
Image Source: Zacks Investment Research
WERN’s Zacks Rank
WERN currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include Ryanair (RYAAY - Free Report) and Expeditors International of Washington (EXPD - Free Report) .
Ryanair currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. RYAAY has an expected earnings growth rate of 9.6% for the current year.
The company has a discouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and missed twice, delivering an average miss of 30%. Shares of RYAAY have risen 16.8% in the past year.
Expeditors carries a Zacks Rank #2 (Buy) at present and has an expected earnings growth rate of 1% for the current year.
The company has a discouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in one of the trailing four quarters and missing thrice. The average miss is 2.7%. EXPD shares have gained 3.4% in the past year.