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Air Lease (AL) Banks on Strong Freight Market & Fleet Growth
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Air Lease Corporation (AL - Free Report) is currently benefitting from strong freight and cargo markets as well as solid shareholder-friendly measures.
We are impressed by Air Lease’s endeavors to reward shareholders. The company has an impressive dividend payment history. In November 2021, the company’s board approved a dividend hike of approximately 15.6% to 18.5 cents per share (annually 74 cents). This marks the company’s ninth dividend increase since February 2013, when it began distributing dividends. Owing to continued improvement in its operations, Air Lease’s board approved a share buyback program worth $150 million in February 2022. The program will run through September 2022. The new buyback program represents a 50% increase from last year’s share repurchase authorization.
Steady growth in fleet, increase in cash collections and improved aircraft sales activity are driving Air Lease’s top line (up 3.6% year over year in 2021).
Strong freight and cargo markets are supporting demand for the company’s wide-body passenger aircraft. Continued recovery in airline operations is further driving lease demand. Higher lease demand coupled with rising interest rates, indicates a rising lease rate environment, which bodes well for Air Lease.
Rising operating expenses pose a threat to the company's bottom line. Total expenses climbed 13% year over year to $1.55 billion in 2021, primarily due to higher interest expenses and depreciation of flight equipment costs.
Zacks Rank & Other Stocks to Consider
Air Lease currently sports a Zacks Rank #1 (Strong Buy).
Investors interested in the broader Zacks Transportation sector can also consider other top-ranked stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in all of the past four quarters. Expeditors is being aided by the uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
The long-term expected EPS (three to five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has increased 38% in the past year. ODFL currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 28.7% in the past year. TRTN currently carries a Zacks Rank #2.
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Air Lease (AL) Banks on Strong Freight Market & Fleet Growth
Air Lease Corporation (AL - Free Report) is currently benefitting from strong freight and cargo markets as well as solid shareholder-friendly measures.
We are impressed by Air Lease’s endeavors to reward shareholders. The company has an impressive dividend payment history. In November 2021, the company’s board approved a dividend hike of approximately 15.6% to 18.5 cents per share (annually 74 cents). This marks the company’s ninth dividend increase since February 2013, when it began distributing dividends. Owing to continued improvement in its operations, Air Lease’s board approved a share buyback program worth $150 million in February 2022. The program will run through September 2022. The new buyback program represents a 50% increase from last year’s share repurchase authorization.
Steady growth in fleet, increase in cash collections and improved aircraft sales activity are driving Air Lease’s top line (up 3.6% year over year in 2021).
Strong freight and cargo markets are supporting demand for the company’s wide-body passenger aircraft. Continued recovery in airline operations is further driving lease demand. Higher lease demand coupled with rising interest rates, indicates a rising lease rate environment, which bodes well for Air Lease.
Rising operating expenses pose a threat to the company's bottom line. Total expenses climbed 13% year over year to $1.55 billion in 2021, primarily due to higher interest expenses and depreciation of flight equipment costs.
Zacks Rank & Other Stocks to Consider
Air Lease currently sports a Zacks Rank #1 (Strong Buy).
Investors interested in the broader Zacks Transportation sector can also consider other top-ranked stocks like Expeditors International of Washington, Inc. (EXPD - Free Report) , Old Dominion Freight Line, Inc. (ODFL - Free Report) and Triton International Limited .
Expeditors has an earnings surprise of 34.2%, having surpassed the Zacks Consensus Estimate in all of the past four quarters. Expeditors is being aided by the uptick in airfreight revenues. We are optimistic about the company’s buyout of Fleet Logistics’ Digital Platform. The acquisition has boosted Expeditors’ online LTL shipping platform, Koho. The move is in line with the company's focus on Digital Solutions.
EXPD currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The long-term expected EPS (three to five years) growth rate for Old Dominion is pegged at 16%. Old Dominion is benefiting from the strong performance of the LTL segment owing to improved freight conditions. In 2021, revenues from the LTL services segment increased 30.7% on a year-over-year basis.
Driven by the tailwinds, the stock has increased 38% in the past year. ODFL currently carries a Zacks Rank #2 (Buy).
The long-term expected EPS (three to five years) growth rate for Triton is pegged at 10%. Gradual increases in trade volumes and container demand bode well for the company. With easing coronavirus-led restrictions in the United States and Europe, the company saw a strong rebound in its business in the third, the fourth of 2020 as well as in each of the four quarters of 2021.
Driven by the tailwinds, the stock has increased 28.7% in the past year. TRTN currently carries a Zacks Rank #2.