2 top rail stocks for your September 2022 watchlist
Rail stocks have long been popular among stock investors. This is because it allows them to provide investors with a reliable source of income and the potential for capital appreciation. To begin with, railway companies own and operate the tracks and infrastructure used by freight trains, and they generate revenue from freight movement. As a result, railroad stocks tend to be less volatile than other types of stocks, making them an attractive option for conservative investors.
Additionally, railroad companies often pay high dividends, which can be an important 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 benefit from an annual dividend yield of 3.75% and 2.10% respectively. Moreover, railroad stocks are interesting from a historical point of view, as they played a vital role in the development of the United States. Over the past two centuries, railways 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.
This week again, railroad stocks made headlines in the stock markets. In detail, a number of major rail operators have sent out a warning about the possibility of a nationwide rail strike. If, in fact, that happens, it could continue to limit supply chain issues in the United States that have lingered since the COVID-19 shutdowns. Knowing this could present a buy-the-dip type opportunity for investors. Knowing that, here are two rail stocks to check out on the stock market this week.
Railroad shares to buy [Or Avoid] Currently
The first standing CSX Company (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 all major metropolitan areas in the eastern United States, where nearly two-thirds of the nation’s population reside. On top of that, the company offers its shareholders an annual dividend yield of 1.31%.
In July alone, 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, that was better than the street consensus estimates for Q2, which were earnings estimates of $0.47 per share and revenue estimates of $3.6 billion. Additionally, revenue for the quarter reflects a 28% year-over-year increase.
James M. Foote, President and CEO, said in his letter to shareholders:Although commodity price volatility and persistent inflation have added uncertainty to the economy, our efforts remain focused on adding the resources needed to improve our network performance, increase customer satisfaction and develop new rail service solutions to generate significant long-term growth.Additionally, CSX shares are down more than 17% year-to-date. They are currently trading at $30.66 per share in Wednesday morning’s trading session. CSX on your list of rail stocks to watch now?
[Read More] 5 Dow Jones Industrial Average stocks to watch in September 2022
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 portfolio of products and services includes rail freight cars, barges, barge management systems, highway guardrails and others.
Today, Trinity Industries offers its shareholders an annual dividend yield of 3.90%. Following that, last week the company announced that its board of directors had declared a quarterly dividend of $0.23 per share on common stock. Impressively, this dividend represents a series of 234th consecutive dividends paid by TRN.
Meanwhile, in July, Trinity Industries released its second quarter 2022 financial results. In them, the company posted earnings per share of $0.14, along with revenue of $416.8 million for the quarter. . Additionally, the company raised guidance that remained in line with analysts’ estimates. In detail, TRN said it estimates 2022 earnings to be between $0.90 and $1.10 per share. This is in comparison to their previously announced guidance which was earnings of $0.85 to $1.05 per share.
Continuing, so far in 2022, TRN shares are still down more than 22% in Wednesday morning’s trading session at $23.62 per share. With that in mind, would it be a good time to invest in Trinity Industries stock for a buy-and-hold opportunity?
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