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Landstar (LSTR) Shares Rise 15.1% in 6 Months: Here's Why

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Landstar System, Inc. (LSTR - Free Report) shares have gained 15.1% of value in the past six months compared with the industry’s 23.7% increase.

Reasons for Surge

Landstar’s efforts to reward shareholders through dividends and share buybacks are impressive.  In a shareholder-friendly move, the company raised quarterly dividend by 13.5% to 21 cents per share (annualized 84 cents) in July. During the first nine months of 2020, the company rewarded its shareholders with $101.4 million through dividend payouts.

Gradual recovery in the freight scenario is a boon to the company and aided third-quarter results. Rise in rail intermodal revenues also bode well.

We are also encouraged by improvement in the company's debt position. At the end of the third quarter, long-term debt (excluding current maturities) declined to $52.6 million compared with $70.2 million at the end of 2019.

Favorable Estimate Revisions

The Zacks Consensus Estimate for current-year earnings has increased 13% to $4.96 per share in the past 30 days.

Zacks Rank & Other Stocks to Consider

Landstar currently carries a Zacks Rank #2 (Buy).

Investors interested in the broader Zacks Transportation sector may also consider stocks like Knight-Swift Transportation Holdings Inc. (KNX - Free Report) , FedEx Corporation (FDX - Free Report) and Herc Holdings Inc. (HRI - Free Report) . All the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, FedEx and Herc Holdings is pegged at 15%, 12% and 6.5%, respectively.

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