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Trucking Industry Rises 12.5% in 3 Months: More Room to Run?
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The Zacks Transportation - Truck industry currently stands to benefit from the solid investor-friendly steps adopted by the industry players.
Consistent shareholder-friendly initiatives in the form of dividend payouts or share buybacks imply the solid financial strength of companies in the trucking industry. Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. These stocks are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario.
To name a few, on Feb 2, 2024, Knight-Swift Transportation Holdings Inc.’s (KNX - Free Report) board of directors approved a dividend hike of 14.2%, thereby raising its quarterly cash dividend to 16 cents from 14 cents per share. The raised dividend is anticipated to be paid out on Mar 25, 2024, to all its shareholders of record as of Mar 8. The move reflects KNX’s intention to utilize free cash to enhance its shareholders’ returns. Notably, KNX has raised its quarterly dividend five times in the past five years for a 167% overall increase.
Knight-Swift Transportation Holdings Inc. Dividend Yield (TTM)
Concurrent with the fourth quarter of 2023 earnings release, on Jan 31, 2024, Old Dominion Freight Line, Inc.’s(ODFL - Free Report) management announced a 30% increase to its first-quarter 2024 dividend over the first quarter of 2023 payout. The new dividend of 52 cents per share is payable on Mar 20, 2024, to shareholders of record at the close of business on Mar 6. The dividend hike raises Old Dominion’s annualized cash dividend rate to $2.08 per share from $1.6. In 2023, ODFL paid out dividends worth $175.1 million and repurchased shares worth $453.6 million.
Old Dominion Freight Line, Inc. Dividend Yield (TTM)
Concurrent with the fourth quarter of 2023 earnings release, on Jan 19, 2024, J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) board of directors approved a dividend hike of 2%, thereby raising its quarterly cash dividend to 43 cents from 42 cents per share. The raised dividend will be paid out on Feb 23, 2024, to all its shareholders of record as of Feb 9. The move reflects JBHT’s intention to utilize free cash to enhance its shareholders’ returns. The company is also active on the buyback front, having resumed the same in the fourth quarter of 2020 after a temporary pause amid coronavirus concerns. In the fourth quarter of 2023, JBHT purchased almost 137,000 shares for $25 million. As of Dec 31, 2023, JBHT had approximately $392 million remaining under its share repurchase authorization.
J.B. Hunt Transport Services, Inc. Dividend Yield (TTM)
On Dec 5, 2023, Landstar System, Inc.’s (LSTR - Free Report) board of directors raised the number of shares of its common stock, which the company is authorized to purchase, to 3,000,000. The latest uptick allows the company to purchase 319,332 new shares, apart from the existing authorization to purchase 2,680,668 shares. Additionally, LSTR’s board has declared a special one-time cash dividend of $2.00 per share. This special dividend will be paid on Jan 19, 2024, to all its shareholders of record as of business on Jan 3, 2024.
Currently, KNX and JBHT carry a Zacks Rank #3 (Hold), while ODFL and LSTR have a Zacks Rank #4 (Sell).
We believe such shareholder-friendly initiatives should boost investor confidence and positively impact the bottom line. Notably, the industry has gained 12.5% over the past three months, outperforming the S&P 500 Index’s northward movement of 8.6% and 11.3% growth of the Zacks Transportation sector.
Image Source: Zacks Investment Research
Despite such positives, the trucking industry continues to grapple with issues like prolonged truck driver shortages and escalating operating expenses, led by high fuel costs.
Driver shortage continues to be a major challenge facing the trucking industry. As old drivers retire, trucking companies find it difficult to hire drivers since the job does not appeal to the younger generation. Weak freight demand is also leading to declining trucking volumes. The American Trucking Associations’s advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 3.5% in January 2024 , after rising 1.2% in December 2023.
Operating expenses are on the rise mainly due to increased fuel costs, hurting the bottom lines of the industry participants. As fuel expenses represent a key input cost for any transportation player, the rise in oil prices does not bode well for the bottom-line growth of trucking stocks. Further, supply-chain woes are also hurting the prospects of the stocks belonging to the trucking industry.
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Trucking Industry Rises 12.5% in 3 Months: More Room to Run?
The Zacks Transportation - Truck industry currently stands to benefit from the solid investor-friendly steps adopted by the industry players.
Consistent shareholder-friendly initiatives in the form of dividend payouts or share buybacks imply the solid financial strength of companies in the trucking industry. Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. These stocks are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario.
To name a few, on Feb 2, 2024, Knight-Swift Transportation Holdings Inc.’s (KNX - Free Report) board of directors approved a dividend hike of 14.2%, thereby raising its quarterly cash dividend to 16 cents from 14 cents per share. The raised dividend is anticipated to be paid out on Mar 25, 2024, to all its shareholders of record as of Mar 8. The move reflects KNX’s intention to utilize free cash to enhance its shareholders’ returns. Notably, KNX has raised its quarterly dividend five times in the past five years for a 167% overall increase.
Knight-Swift Transportation Holdings Inc. Dividend Yield (TTM)
Knight-Swift Transportation Holdings Inc. dividend-yield-ttm | Knight-Swift Transportation Holdings Inc. Quote
Concurrent with the fourth quarter of 2023 earnings release, on Jan 31, 2024, Old Dominion Freight Line, Inc.’s(ODFL - Free Report) management announced a 30% increase to its first-quarter 2024 dividend over the first quarter of 2023 payout. The new dividend of 52 cents per share is payable on Mar 20, 2024, to shareholders of record at the close of business on Mar 6. The dividend hike raises Old Dominion’s annualized cash dividend rate to $2.08 per share from $1.6. In 2023, ODFL paid out dividends worth $175.1 million and repurchased shares worth $453.6 million.
Old Dominion Freight Line, Inc. Dividend Yield (TTM)
Old Dominion Freight Line, Inc. dividend-yield-ttm | Old Dominion Freight Line, Inc. Quote
Concurrent with the fourth quarter of 2023 earnings release, on Jan 19, 2024, J.B. Hunt Transport Services, Inc.’s (JBHT - Free Report) board of directors approved a dividend hike of 2%, thereby raising its quarterly cash dividend to 43 cents from 42 cents per share. The raised dividend will be paid out on Feb 23, 2024, to all its shareholders of record as of Feb 9. The move reflects JBHT’s intention to utilize free cash to enhance its shareholders’ returns. The company is also active on the buyback front, having resumed the same in the fourth quarter of 2020 after a temporary pause amid coronavirus concerns. In the fourth quarter of 2023, JBHT purchased almost 137,000 shares for $25 million. As of Dec 31, 2023, JBHT had approximately $392 million remaining under its share repurchase authorization.
J.B. Hunt Transport Services, Inc. Dividend Yield (TTM)
J.B. Hunt Transport Services, Inc. dividend-yield-ttm | J.B. Hunt Transport Services, Inc. Quote
On Dec 5, 2023, Landstar System, Inc.’s (LSTR - Free Report) board of directors raised the number of shares of its common stock, which the company is authorized to purchase, to 3,000,000. The latest uptick allows the company to purchase 319,332 new shares, apart from the existing authorization to purchase 2,680,668 shares. Additionally, LSTR’s board has declared a special one-time cash dividend of $2.00 per share. This special dividend will be paid on Jan 19, 2024, to all its shareholders of record as of business on Jan 3, 2024.
Currently, KNX and JBHT carry a Zacks Rank #3 (Hold), while ODFL and LSTR have a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
We believe such shareholder-friendly initiatives should boost investor confidence and positively impact the bottom line. Notably, the industry has gained 12.5% over the past three months, outperforming the S&P 500 Index’s northward movement of 8.6% and 11.3% growth of the Zacks Transportation sector.
Image Source: Zacks Investment Research
Despite such positives, the trucking industry continues to grapple with issues like prolonged truck driver shortages and escalating operating expenses, led by high fuel costs.
Driver shortage continues to be a major challenge facing the trucking industry. As old drivers retire, trucking companies find it difficult to hire drivers since the job does not appeal to the younger generation. Weak freight demand is also leading to declining trucking volumes. The American Trucking Associations’s advanced seasonally adjusted For-Hire Truck Tonnage Index decreased 3.5% in January 2024 , after rising 1.2% in December 2023.
Operating expenses are on the rise mainly due to increased fuel costs, hurting the bottom lines of the industry participants. As fuel expenses represent a key input cost for any transportation player, the rise in oil prices does not bode well for the bottom-line growth of trucking stocks. Further, supply-chain woes are also hurting the prospects of the stocks belonging to the trucking industry.