2 Top Railroad Stocks For Your September 2022 Watchlist
Railroad stocks have long been popular among stock market investors. This is because it provides they can provide investors with a reliable source of income and the potential for capital appreciation. For starters, railroad companies own and operate the tracks and infrastructure used by freight trains, and they generate revenue from the transportation of goods. As a result, railroad stocks tend to be less volatile than other types of stocks, making them an attractive option for conservative investors.
In addition, railroad companies often pay high dividends, which can provide a significant source of income. For example, if we look at companies in the sector like Greenbrier Companies Inc. (NYSE: GBX), and Norfolk Southern Corporation (NYSE: NSC). Shareholders of both companies enjoy an annual dividend yield of 3.75%, and 2.10% respectively. Also, railroad stocks are interesting from a historical perspective, as they played a vital role in the development of the United States. Over the past two centuries, railroads have transformed the economy and shaped the country’s landscape. Today, they continue to play an important role in the movement of goods and people across the country.
Just this week, railroad stocks have been in the stock market news headlines. In detail, a number of large railroad operators have sent a warning about the possibility of a nationwide railroad strike. If in fact, this does happen, it could continue to constrain the U.S. supply chain issues that have been ongoing since the COVID-19 lockdowns. Knowing this could present a possible buy-the-dip type opportunity for investors. Knowing this, here are two railroad stocks to check out in the stock market this week.
Railroad Stocks To Buy [Or Avoid] Right Now
First up, CSX Corporation (CSX) is an American railway company operating primarily in the Eastern United States and Canada. For a sense of scale, the company’s network connects every major metropolitan area in the Eastern part of the U.S, which is where almost two-thirds of the country’s population resides. Aside from that, the company offers its shareholders an annual dividend yield of 1.31%.
Just in July, CSX reported better-than-expected second-quarter 2022 financial results. Diving into the report, the company reported revenue of $3.82 billion for the quarter, with earnings per share of $0.50. As a result, this came in better than the street’s consensus estimates for the 2nd quarter, which were earnings estimates of $0.47 per share, and revenue estimates of $3.6 billion. In addition, the revenue figures for the quarter reflected a 28% year-over-year increase.
James M. Foote, President, and CEO said in his letter to shareholders, “Though volatile commodity prices and persistent inflation have added uncertainty to the economy, our efforts remain focused on adding the resources needed to deliver improvements in our network performance, lift customer satisfaction and develop new rail service solutions to drive meaningful growth over the long term.” Furthermore, shares of CSX stock have dropped over 17% year-to-date. They currently trade at $30.66 per share as of Wednesday morning’s trading session. Considering this, will you be adding CSX to your list of railroad stocks to watch in the stock market now?
Next, Trinity Industries Inc. (TRN) is a diversified industrial company. In short, the company is a leading provider of transportation infrastructure products and services. Their product and services portfolio includes railroad freight cars, barges, barge management systems, highway guardrails, and others.
Today, Trinity Industries provides its shareholders with an annual dividend yield of 3.90%. Following up on this, just last week the company announced its Board of Directors has declared a quarterly dividend of $0.23 per share on common stock. Impressively, this dividend represents a streak of 234th consecutive paid dividends by TRN.
Meanwhile, back in July Trinity Industries reported its Q2 2022 financial results. In them, the company posted earnings per share of $0.14, along with revenue of $416.8 million for the quarter. Furthermore, the company raised guidance that stayed in line with analysts’ estimates. In detail, TRN said it estimates 2022 earnings to come in between $0.90 to $1.10 per share. This is in comparison with their previously announced forecast which was earnings of $0.85 to $1.05 per share.
Moving along, so far in 2022 shares of TRN stock is still down over 22% as of Wednesday morning’s trading session at $23.62 per share. With that in mind, could now be a good time to invest in Trinity Industries stock for a buy-and-hold opportunity?