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Here's Why You Should Retain Werner (WERN) in Portfolio Now
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Werner Enterprises, Inc. (WERN - Free Report) is benefiting from improving freight market conditions and solid investor-friendly measures. However, high debt levels are worrisome.
Factors Favoring WERN
Werner’s efforts to boost its shareholders’ value via dividend payouts and shares repurchases are commendable. During 2022 and 2021, Werner paid $32.2 million and $29.08 million as dividends and repurchased shares worth $110.40 million and $104.44 million, respectively. As of Dec 31, 2022, WERN had 2.3 million shares available under its share repurchase authorization.
Werner is gradually recovering from the COVID-19-induced slump, thanks to improving freight market conditions in the United States. Notably, revenues from Logistics and Truckload Transportation Services for fourth-quarter 2022 increased 13% and 15%, year over year, respectively. While Logistics benefited from a rise in truckload logistics revenues, Truckload Transportation Services benefited from higher fuel surcharge revenues.
Key Risk
Werner exited fourth-quarter 2022 with cash and cash equivalents of $107.24 million, way below the long-term debt (net of current portion) of $687.50 million. This implies that the company does not have enough cash to meet its debt levels.
American Airlines, which currently carries a Zacks Rank #2 (Buy), is benefiting from the improved air-travel-demand situation. In the fourth quarter of 2022, AAL reported earnings of $1.17 per share, surpassing the Zacks Consensus Estimate by 2.63%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For first-quarter and full-year 2023, AAL’s earnings are expected to register 101.3% and 396% growth, respectively, on a year-over-year basis.
Copa Holdings sports a Zacks Rank #1 at present. We are encouraged by CPA's focus on its cargo segment.
For first-quarter and full-year 2023, CPA’s earnings are expected to register 324.3% and 42.5% growth, respectively, on a year-over-year basis.
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Here's Why You Should Retain Werner (WERN) in Portfolio Now
Werner Enterprises, Inc. (WERN - Free Report) is benefiting from improving freight market conditions and solid investor-friendly measures. However, high debt levels are worrisome.
Factors Favoring WERN
Werner’s efforts to boost its shareholders’ value via dividend payouts and shares repurchases are commendable. During 2022 and 2021, Werner paid $32.2 million and $29.08 million as dividends and repurchased shares worth $110.40 million and $104.44 million, respectively. As of Dec 31, 2022, WERN had 2.3 million shares available under its share repurchase authorization.
Werner is gradually recovering from the COVID-19-induced slump, thanks to improving freight market conditions in the United States. Notably, revenues from Logistics and Truckload Transportation Services for fourth-quarter 2022 increased 13% and 15%, year over year, respectively. While Logistics benefited from a rise in truckload logistics revenues, Truckload Transportation Services benefited from higher fuel surcharge revenues.
Key Risk
Werner exited fourth-quarter 2022 with cash and cash equivalents of $107.24 million, way below the long-term debt (net of current portion) of $687.50 million. This implies that the company does not have enough cash to meet its debt levels.
Zacks Rank & Key Picks
Werner currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are American Airlines (AAL - Free Report) and Copa Holdings, S.A. (CPA - Free Report) .
American Airlines, which currently carries a Zacks Rank #2 (Buy), is benefiting from the improved air-travel-demand situation. In the fourth quarter of 2022, AAL reported earnings of $1.17 per share, surpassing the Zacks Consensus Estimate by 2.63%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
For first-quarter and full-year 2023, AAL’s earnings are expected to register 101.3% and 396% growth, respectively, on a year-over-year basis.
Copa Holdings sports a Zacks Rank #1 at present. We are encouraged by CPA's focus on its cargo segment.
For first-quarter and full-year 2023, CPA’s earnings are expected to register 324.3% and 42.5% growth, respectively, on a year-over-year basis.