Market Wrap-up for Dec. 30 - Transportation and Aerospace in Focus

Market Wrap-up for Dec. 30 – Transportation and Aerospace in Focus


Yesterday, we highlighted the best performing dividend stocks of 2014 and found that a wide array of industries performed well during the past year. Today, I’d like to focus on two of those industries: Transportation and Aerospace.

The Big Beneficiaries of Falling Oil

Several companies from the transportation and aerospace industries landed in the list of top performing stocks of the year. These companies all have energy accounting for a large portion of operational costs. With crude oil futures falling roughly 50% from six months ago (WTI is currently at about $53/bbl), transportation and aerospace stocks have skyrocketed.

Below, I’d like to highlight some of these industries’ biggest winners.

Southwest Airlines (LUV)

  • Yield: 0.57%
  • Dividend Growth: 2 years

Year-to-date, this stock has gained over 120%. Since 2012, the company has been raising its dividends from an annual $0.018 per share to $0.24. Southwest has actually paid a dividend since 1993, but from 2001 to 2011 the annual payout remained unchanged.

Knight Transportation (KNX)

  • Yield: 0.70%
  • Dividend Growth: n/a

This trucking company rose roughly 87% year-to-date. The stock currently offers an annual payout of $0.24. Knight Transportation has consistently paid a dividend since 2004, but its payout has remained unchanged since 2011.

Delta Airlines (DAL)

  • Yield: 0.73%
  • Dividend Growth: 50%

In 2014, Delta Airlines’ shares have risen over 75%. The company started paying a dividend in 2013 and has raised its annual payout from $0.60 per share to the current $0.90 per share, marking a 50% increase.

The Bottom Line

While these stocks don’t have particularly attractive yields, these companies have seemingly found their footing over the last two years after taking steep hits during the financial crisis of 2008. Though the decline in crude prices was the main driver behind the 2014 performance of these companies, it will be interesting to see how these transportation and aerospace players develop in terms of becoming solid dividend-paying companies.