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Six Reasons Why Investors Should Add GATX to Their Portfolio

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GATX Corporation (GATX - Free Report) is benefiting from its shareholder-friendly initiatives through which it rewards its shareholders in the form of dividend payments and share repurchases.

Against this backdrop, let’s look at the factors that make this stock an attractive pick.

What Makes GATX an Attractive Pick?

An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse over the past six months. Shares of GATX have gained 7.6% over the past six months.

Zacks Investment Research
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Solid Zacks Rank: GATXhasa Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.

Northward Estimate Revisions:The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 90 days, the Zacks Consensus Estimate for GATX’s 2023 earnings has moved up 1.9% year over year.

Positive Earnings Surprise History: GATX has an impressive earnings surprise history. The company delivered an earnings surprise of 16.52% in the last four quarters, on average. 

Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For 2023 and 2024, GATX’s earnings are expected to grow 10.54% and 5.46% year over year, respectively.

Growth Factors:The gradual improvement in the North American railcar leasing market is aiding GATX’s top line. Demand for the majority of railcar types in GATX's fleet remains robust and absolute lease rates have been increasing. For 2023, GATX anticipates the railcar leasing environment in North America to remain favorable.

GATX expects current-year earnings in the range of $6.50-$6.90 per share.  We are upbeat about GATX's measures to reward its shareholders through dividends and buybacks despite coronavirus-led woes. Consistent dividend payouts highlight GATX's commitment to boosting shareholders’ value and underscore its strong financial condition and bright prospects.

Other Stocks to Consider

Some other top-ranked stocks from the broader Zacks Transportation sector are Alaska Air Group, Inc. (ALK - Free Report) and American Airlines (AAL - Free Report) , both carrying a Zacks Rank #2.

Alaska Air has an expected earnings growth rate of 32.64% for the current year. ALK delivered a trailing four-quarter earnings surprise of 8.98%, on average.

The Zacks Consensus Estimate for ALK’s current-year earnings has improved 7.1% over the past 90 days. Shares of ALK have soared 11.1% over the past six months.

AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 7.79%, on average.

The Zacks Consensus Estimate for AAL’s current-year earnings has improved 19.3% over the past 90 days. Shares of AAL have gained 19.4% over the past six months.


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