Back to top

Image: Shutterstock

Scoop Up 3 Trucking Stocks With Dividend Hikes to Aid Portfolio

Read MoreHide Full Article

Market volatility has gripped the U.S. market of late. Headwinds like the Russia-Ukraine crisis and a four-decade high inflation rate induced the present situation. But does this mean that investors should shun equities completely? The answer is a categorical no. In fact, such an uncertain scenario calls for investing in stocks that offer a consistent and safe stream of income.

The current write-up focusses on investors interested in the Zacks Transportation -Truck industry. In view of the above-mentioned challenges, we believe, investors interested in this industry should pump resources into dividend growth stocks. We selected three dividend growth stocks from the trucking industry, namely J.B. Hunt Transport Services (JBHT - Free Report) , Old Dominion Freight Line (ODFL - Free Report) and Forward Air Corporation (FWRD - Free Report) that could be compelling picks amid market unpredictability.

Like most corners in the investing space, the Zacks Transportation -Truck industry has been struggling this year, as reflected in its 25% year-to-date decline with respect to price performance.

Zacks Investment Research
Image Source: Zacks Investment Research

Driver shortage in the trucking industry is a big problem and worsens the supply chain across the United States. Driver scarcity issues are limiting trucking capacity, making it difficult for the respective companies to meet buoyant freight demand. As old drivers retire, trucking companies find it increasingly difficult to recruit the new ones despite significant pay raises.

With supply-related constraints likely to persist in the near future and freight demand expected to increase, led by an increased consumer spending, construction and manufacturing activities, trucking rates should remain elevated, thus boosting the top line of the trucking companies. Investors would do well to take advantage of this lack of equilibrium and add trucking stocks to their portfolios for healthy returns.

However, due to the geopolitical woes highlighted above, investing in stocks that deliver a steady flow of income and are unfazed by any market gyrations appears to be a prudent move. This calls for betting on dividend-paying stocks.

As investors prefer an income-generating stock, a high dividend-yielding one is much coveted. Needless to say, they are always on the lookout for companies with a consistent and incremental dividend history.

Below we present three trucking stocks that already announced dividend hikes in 2022 despite the ongoing turbulence, thereby highlighting their financial prosperity. These stocks presently possess a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

J.B. Hunt Transport Services is benefiting from ramped-up fleet productivity, a favorable customer freight mix, higher contractual and spot rates, and an increased load count in the Truck segment. Strength in its final mile network owing to a spurt in online shopping is also a major catalyst. We are pleased with JBHT’s efforts to reward its shareholders even in these difficult times. In January, JBHT hiked its dividend 33% to 40 cents per share (annually: $1.60). J.B. Hunt raised its dividend twice last year.

The Zacks Consensus Estimate for J.B. Hunt’s 2022 earnings has moved 1.2% north in the past 60 days. JBHT’s earnings trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average being 10.19%.

Old Dominion Freight Line is being aided by improved freight market conditions. Efforts to reward its shareholders also augur well. In February 2022, ODFL’s board cleared a 50% increase in its quarterly dividend payout, taking the total to 30 cents per share.

ODFL’s earnings trumped the Zacks Consensus Estimate in each of the trailing four quarters, the average being 6.46%. The Zacks Consensus Estimate for ODFL’s 2022 earnings has moved 2.83% north in the past 60 days.

Higher volumes owing to better freight market environment bolster Forward Air’s top line. Thanks to growth in its operations, FWRD is committed to rewarding its shareholders with dividends and share buybacks. In February, FWRD’s board approved a 14% hike in its quarterly dividend payment, expanding the total to 24 cents per share.

The Zacks Consensus Estimate for Forward Air’s 2022 earnings has been revised 4.14% upward in the past 60 days. FWRD’s earnings beat the Zacks Consensus Estimate in each of the trailing four quarters, the average being 11.11%.

In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

J.B. Hunt Transport Services, Inc. (JBHT) - free report >>

Old Dominion Freight Line, Inc. (ODFL) - free report >>

Forward Air Corporation (FWRD) - free report >>