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Here's Why You Should Retain GATX Stock in Portfolio Now
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GATX Corporation (GATX - Free Report) is benefiting from its regular dividend payments and gradual improvements in the North America railcar leasing market. However, high debt is concerning.
Factors Favoring GATX
GATX, which has been rewarding shareholders regularly dividends since 1919, holds an impressive record with respect to dividends and buybacks. In January 2023, the company raised its quarterly dividend by 5.8% to 55 cents per share. Its commitment to reward shareholders despite COVID-19-related disruptions is encouraging. Notably, 2023 marks the 105th consecutive year of GATX paying out dividends.
The gradual improvement in the North American railcar leasing market is a huge positive for GATX. Management expects recovery in the North American railcar leasing market to continue throughout 2023. The Rail International segment's 2023 profit is likely to rise as solid demand for new and existing railcars continues in Europe and India.
Shares of GATX have gained 42.3% in the past year compared with 35.7% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Key Risks
GATX is a highly leveraged company. Its debt-to-equity ratio (in terms of percentage) currently stands above 300%. A high debt-to-equity ratio does not bode well and is risky, as it implies that the company is aggressively financing its growth with debt.
Zacks Rank
GATX currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and CSX Corporation (CSX - Free Report) .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and 2023, CPA’s earnings are expected to register a 912.5% and 84.14% surge, respectively, on a year-over-year basis.
CSX, which currently carries a Zacks Rank #2 (Buy), expects revenue ton miles in 2023 to grow in the low-single digits, driven by strong anticipated performances in the merchandise and coal units.
CSX's efforts to reward its shareholders through dividends and buybacks are also impressive.
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Here's Why You Should Retain GATX Stock in Portfolio Now
GATX Corporation (GATX - Free Report) is benefiting from its regular dividend payments and gradual improvements in the North America railcar leasing market. However, high debt is concerning.
Factors Favoring GATX
GATX, which has been rewarding shareholders regularly dividends since 1919, holds an impressive record with respect to dividends and buybacks. In January 2023, the company raised its quarterly dividend by 5.8% to 55 cents per share. Its commitment to reward shareholders despite COVID-19-related disruptions is encouraging. Notably, 2023 marks the 105th consecutive year of GATX paying out dividends.
The gradual improvement in the North American railcar leasing market is a huge positive for GATX. Management expects recovery in the North American railcar leasing market to continue throughout 2023. The Rail International segment's 2023 profit is likely to rise as solid demand for new and existing railcars continues in Europe and India.
Shares of GATX have gained 42.3% in the past year compared with 35.7% growth of the industry it belongs to.
Image Source: Zacks Investment Research
Key Risks
GATX is a highly leveraged company. Its debt-to-equity ratio (in terms of percentage) currently stands above 300%. A high debt-to-equity ratio does not bode well and is risky, as it implies that the company is aggressively financing its growth with debt.
Zacks Rank
GATX currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors interested in the Zacks Transportation sector are Copa Holdings, S.A. (CPA - Free Report) and CSX Corporation (CSX - Free Report) .
Copa Holdings, which presently flaunts a Zacks Rank #1 (Strong Buy), is aided by improved air-travel demand. We are encouraged by the company’s initiatives to modernize its fleet. CPA's focus on its cargo segment is also impressive. You can see the complete list of today’s Zacks #1 Rank stocks here.
For second-quarter and 2023, CPA’s earnings are expected to register a 912.5% and 84.14% surge, respectively, on a year-over-year basis.
CSX, which currently carries a Zacks Rank #2 (Buy), expects revenue ton miles in 2023 to grow in the low-single digits, driven by strong anticipated performances in the merchandise and coal units.
CSX's efforts to reward its shareholders through dividends and buybacks are also impressive.