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Here's Why It's Worth Investing in C.H. Robinson (CHRW) Now
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Shares of C.H. Robinson Worldwide (CHRW - Free Report) gained 21.6%, outperforming the industry’s rally of 9% in 2017.
What’s Behind the Uptick?
The company’s efforts to reward shareholders through dividends and share buy backs are impressive. In November 2017, the board of directors approved a 2.2% hike in its quarterly cash dividend to 46 cents per share (or $1.84 annually). Also, C.H. Robinson has an impressive dividend payment history.
Investors always prefer an income-generating stock. Hence, a high dividend-yielding one is obviously much coveted. It goes without saying that investors are always on the lookout for companies with a track record of consistent and incremental dividend payments to put their money on.
Furthermore, C.H. Robinson’s efforts to expand globally through mergers are encouraging. The acquisition of Milgram & Company, completed in August 2017, has boosted the company's global presence and will be accretive in the current year. In 2016, it acquired APC Logistics as well. This deal has boosted C.H. Robinson’s presence in the Australia- New Zealand region.
New Tax Regime is a Positive
On Dec 22, President Trump signed the much-anticipated tax bill into law (Tax Cut and Jobs Act). The $1.5 trillion tax overhaul package reduces corporate taxes from 35% to 21%. The significant reduction in corporate tax rate is likely to aid C.H. Robinson, for which the effective tax rate was 34.2% in the first nine months of 2017.
Moreover, companies like C.H. Robinson spend significantly for capital expenditures. In the new regime, these companies will be able to deduct their capital expenditures from taxable income immediately, which was not allowed earlier. As a result, their annual tax bills would be lowered significantly owing to higher deductions. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others.
In fact, the new tax regime is not only a positive for C.H. Robinson but other transportation players like Union Pacific Corporation (UNP - Free Report) as well. Evidently, Southwest Airlines (LUV - Free Report) and American Airlines Group (AAL - Free Report) announced bonuses worth $1,000 per employee, following the tax overhaul.
Earnings Estimates on an Upswing at C.H. Robinson
Upward estimate revisions reflect optimism in a stock’s prospects. C.H. Robinson scores impressively on this front as well. The stock has seen the Zacks Consensus Estimate for full-year 2017 and 2018 earnings being revised 1.8% and 4.8% upward, respectively, over the last 90 days.
Taking into account the above-mentioned tailwinds, we believe that the current price represents an attractive entry point for investors. The company’s Zacks Rank #2 (Buy) also supports our view. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Here's Why It's Worth Investing in C.H. Robinson (CHRW) Now
Shares of C.H. Robinson Worldwide (CHRW - Free Report) gained 21.6%, outperforming the industry’s rally of 9% in 2017.
What’s Behind the Uptick?
The company’s efforts to reward shareholders through dividends and share buy backs are impressive. In November 2017, the board of directors approved a 2.2% hike in its quarterly cash dividend to 46 cents per share (or $1.84 annually). Also, C.H. Robinson has an impressive dividend payment history.
Investors always prefer an income-generating stock. Hence, a high dividend-yielding one is obviously much coveted. It goes without saying that investors are always on the lookout for companies with a track record of consistent and incremental dividend payments to put their money on.
Furthermore, C.H. Robinson’s efforts to expand globally through mergers are encouraging. The acquisition of Milgram & Company, completed in August 2017, has boosted the company's global presence and will be accretive in the current year. In 2016, it acquired APC Logistics as well. This deal has boosted C.H. Robinson’s presence in the Australia- New Zealand region.
New Tax Regime is a Positive
On Dec 22, President Trump signed the much-anticipated tax bill into law (Tax Cut and Jobs Act). The $1.5 trillion tax overhaul package reduces corporate taxes from 35% to 21%. The significant reduction in corporate tax rate is likely to aid C.H. Robinson, for which the effective tax rate was 34.2% in the first nine months of 2017.
Moreover, companies like C.H. Robinson spend significantly for capital expenditures. In the new regime, these companies will be able to deduct their capital expenditures from taxable income immediately, which was not allowed earlier. As a result, their annual tax bills would be lowered significantly owing to higher deductions. This, in turn, will leave more cash in the hands of these companies to fund their capital expenditures, acquisitions and share repurchases, among others.
In fact, the new tax regime is not only a positive for C.H. Robinson but other transportation players like Union Pacific Corporation (UNP - Free Report) as well. Evidently, Southwest Airlines (LUV - Free Report) and American Airlines Group (AAL - Free Report) announced bonuses worth $1,000 per employee, following the tax overhaul.
Earnings Estimates on an Upswing at C.H. Robinson
Upward estimate revisions reflect optimism in a stock’s prospects. C.H. Robinson scores impressively on this front as well. The stock has seen the Zacks Consensus Estimate for full-year 2017 and 2018 earnings being revised 1.8% and 4.8% upward, respectively, over the last 90 days.
Taking into account the above-mentioned tailwinds, we believe that the current price represents an attractive entry point for investors. The company’s Zacks Rank #2 (Buy) also supports our view. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>