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3 Transport Equipment & Leasing Stocks With Solid Dividend Yield

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The Zacks Transportation - Equipment and Leasing industry is gaining from healthy equipment and lease demand on the back of impressive consumer spending, despite the current uncertain scenario. Businesses keen on making capital investments to ramp up operations are also adding stimulus to lease demand. The buoyancy in the industry is further confirmed by its Zacks Industry Rank #51, which places it in the top 20% of more than 250 Zacks industries.

Driven by the tailwinds, the industry has gained 31.3% over the past three months, outperforming the S&P 500 Index’s 8.5% appreciation and 8.4% growth of the broader Zacks Transportation sector.

Zacks Investment Research
Image Source: Zacks Investment Research

Given this encouraging backdrop, it would be a wise decision to invest in some dividend-paying stocks like Ryder System, Inc. (R - Free Report) , Triton International Limited and GATX Corporation (GATX - Free Report) from the Transportation - Equipment and Leasing industry.

Why Dividend Growth Stocks?

Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market, and act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, these offer downside protection with their consistent increase in payouts.

Additionally, these stocks have superior fundamentals that make dividend growth a quality and promising investment for the long term. These include a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics.

In view of the tailwinds mentioned, it can be safely said that dividend-paying stocks appear as a preferred option compared to non-dividend-paying stocks in periods of high degree of market volatility like the present situation.

3 Transport Equipment & Leasing Stocks to Embrace Now

In order to choose some of the best dividend stocks from the aforementioned industry, we have run the Zacks Stock Screener to identify stocks with a dividend yield in excess of 2% and a sustainable dividend payout ratio of less than 60%. Moreover, each of the three stocks mentioned below carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Ryder: Headquartered in Miami, FL, Ryder operates as a logistics and transportation company worldwide. Ryder pays out a quarterly dividend of 62 cents ($2.48 annualized) per share, which gives it a 3.19% yield at the current stock price. This company’s payout ratio is 16% of its earnings at present. The five-year dividend growth rate of 3.85%. (Check Ryder’s dividend history here).

In July 2022, Ryder announced a 7% hike in its quarterly dividend, taking the total to 62 cents per share (annualized $2.48). The first installment of the increased dividend will be paid out on Sep 16, 2022, to shareholders of record as of Aug 22.

Ryder System, Inc. Dividend Yield (TTM)

Ryder System, Inc. Dividend Yield (TTM)

Ryder System, Inc. dividend-yield-ttm | Ryder System, Inc. Quote

Ryder is benefiting from improving economic and freight market conditions in the United States. R’s raised outlook for 2022 is also encouraging. It expects total revenues and operating revenues to increase approximately 22% and 16%, respectively, in 2022 (previous view: both were expected to rise 17% and 14%, respectively). Adjusted EPS for the whole year is now estimated in the range of $14.30 - $14.80 compared with the $13.00-$14.00 range forecast while releasing second-quarter 2022 results in July.

Triton International: Headquartered in Hamilton, Bermuda, Triton International engages in the acquisition, leasing, re-leasing, and sale of various types of intermodal containers and chassis to shipping lines and freight forwarding companies and manufacturers.

Triton pays out a quarterly dividend of 65 cents ($2.60 annualized) per share, which gives it a 4.18% yield at the current stock price. This company’s payout ratio is 24%, with a five-year dividend growth rate of 6.98%. (Check Triton’s dividend history here).

GATX: Headquartered in Chicago, IL, GATX operates as a railcar leasing company in the United States and internationally. GATX pays out a quarterly dividend of 52 cents ($2.08 annualized) per share, which gives it a 2.17% yield at the current stock price. This company’s payout ratio is 34%, with a five-year dividend growth rate of 4.46%. (Check GATX’s dividend history here).

GATX has been paying regular dividends since 1919 and holds an impressive record with respect to dividends and buybacks. In January 2022, the company raised its quarterly dividend by 4% to 52 cents per share, marking the 104th consecutive year of dividend payment by the company. The gradual improvement in the North American railcar leasing market is aiding GATX’s top line.

GATX Corporation Dividend Yield (TTM)

GATX Corporation Dividend Yield (TTM)

GATX Corporation dividend-yield-ttm | GATX Corporation Quote


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