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Here's Why Investors Should Hold Wabtec (WAB) Stock Now
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Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) , has performed well in the past year and has the potential to sustain the momentum in the future.
Against this backdrop, let’s look at the factors why investors should retain this stock now despite headwinds.
Highlighting its pro-investor stance, Wabtec's management announced a 17.6% increase to its quarterly dividend (concurrent with its fourth-quarter 2023 earnings release on Feb 14, 2024). The new dividend of 20 cents per share will be paid on Mar 8, 2024, to shareholders of record at the close of business on Feb 23. The dividend hike raises Wabtec’s annualized cash dividend rate to 80 cents from 68 cents.
Additionally, WAB’s board announced a $1 billion share buyback authorization. WAB has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging. In 2023, WAB rewarded its shareholders through a combination of cash dividends ($123 million) and share repurchases ($409 million). In 2022, WAB rewarded its shareholders through a combination of cash dividends ($111 million) and share repurchases ($473 million). Such shareholder-friendly initiatives not only boost investor confidence but positively impacts the company's bottom line.
The positive sentiment surrounding the stock is evident from the fact that the Zacks Consensus Estimate for current-year earnings has been revised upward by 2.7% over the past 60 days. Further, WAB has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the past four quarters (missed the mark in the remaining quarter). The average beat is 6.63%. Wabtec has an expected earnings growth rate of 13.51% for the current year.
The company’s shares gained 49.5% in the past year, outperforming the 46.7% rise of the industry it belongs to and the S&P 500 Index’s northward movement of 24.9%.
Image Source: Zacks Investment Research
On the flip side, supply-chain disruptions are a bane for a company. Factors like higher commodity costs and shortages of components, chips and labor hurt results. These headwinds are likely to hurt the company's results, atleast in the near term.
High operating expenses are hurting Wabtec's bottom line. Evidently, total operating expenses in 2023 increased 9.7% year over year.
Air Lease has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 20.15%.
The Zacks Consensus Estimate for 2024 earnings has been revised 27.7% upward over the past 90 days. AL has an expected earnings growth rate of 29.96% for 2024. Shares of AL have gained 31.7% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 27.3% over the past 90 days. Shares of SKYW have surged 211.1% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.
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Here's Why Investors Should Hold Wabtec (WAB) Stock Now
Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB - Free Report) , has performed well in the past year and has the potential to sustain the momentum in the future.
Against this backdrop, let’s look at the factors why investors should retain this stock now despite headwinds.
Highlighting its pro-investor stance, Wabtec's management announced a 17.6% increase to its quarterly dividend (concurrent with its fourth-quarter 2023 earnings release on Feb 14, 2024). The new dividend of 20 cents per share will be paid on Mar 8, 2024, to shareholders of record at the close of business on Feb 23. The dividend hike raises Wabtec’s annualized cash dividend rate to 80 cents from 68 cents.
Additionally, WAB’s board announced a $1 billion share buyback authorization. WAB has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging. In 2023, WAB rewarded its shareholders through a combination of cash dividends ($123 million) and share repurchases ($409 million). In 2022, WAB rewarded its shareholders through a combination of cash dividends ($111 million) and share repurchases ($473 million). Such shareholder-friendly initiatives not only boost investor confidence but positively impacts the company's bottom line.
The positive sentiment surrounding the stock is evident from the fact that the Zacks Consensus Estimate for current-year earnings has been revised upward by 2.7% over the past 60 days. Further, WAB has an encouraging track record with respect to earnings surprise, having surpassed the Zacks Consensus Estimate in three of the past four quarters (missed the mark in the remaining quarter). The average beat is 6.63%. Wabtec has an expected earnings growth rate of 13.51% for the current year.
The company’s shares gained 49.5% in the past year, outperforming the 46.7% rise of the industry it belongs to and the S&P 500 Index’s northward movement of 24.9%.
Image Source: Zacks Investment Research
On the flip side, supply-chain disruptions are a bane for a company. Factors like higher commodity costs and shortages of components, chips and labor hurt results. These headwinds are likely to hurt the company's results, atleast in the near term.
High operating expenses are hurting Wabtec's bottom line. Evidently, total operating expenses in 2023 increased 9.7% year over year.
Zacks Rank & Stocks to Consider
Wabtec currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Transportation sector are Air Lease Corporation (AL - Free Report) and SkyWest, Inc. (SKYW - Free Report) . Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Air Lease has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 20.15%.
The Zacks Consensus Estimate for 2024 earnings has been revised 27.7% upward over the past 90 days. AL has an expected earnings growth rate of 29.96% for 2024. Shares of AL have gained 31.7% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 27.3% over the past 90 days. Shares of SKYW have surged 211.1% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.