The recent tariffs, taxes and rhetoric about a trade war have begun to takes their toll on a variety of industrial and manufacturing names.
It’s no secret that the overall market has been trending lower in recent weeks. But thanks to its strong moat and immense scale, our Best Dividend Stocks List pick in the transportation sector is still chugging right along.
Despite the trade issues, our pick continues to see rising freight volumes across both domestic- and international-bound goods. With an irreplaceable moat of rail networks crisscrossing the entire United States, our pick continues to be the go-to name when it comes to shipping goods. And that’s been great for the firm’s bottom line, with its earnings jumping more than 25% during the first quarter of this year alone.
But our transportation pick isn’t done yet.
Several catalysts exist that could continue to push those earnings even higher in the future. Thanks to the Republican tax plan and its nearly 100% domestic focus, our pick continues to see the benefit from the lower domestic rate. Meanwhile, rising oil production in pipeline-challenged areas has once again made crude-by-rail a viable shipping choice. These and other measures will only strengthen our pick’s cash flows, earnings and dividend growth.
To summarize, here are five reasons why you should own this stock:
- Complete monopoly and irreplaceable assets over the area in which it operates.
- A burgeoning dividend contender with roughly a decade’s worth of dividend increases, including a nearly 10% boost at the start of the year.
- A growing economy coupled with the right mix of volume growth and pricing mechanisms helped the company post a +25% increase in its earnings in the last quarter.
- Big winner from the Republican Tax Plan and lower overall corporate tax rates.
- Healthy payout ratio of 38% and growing yield of 2.06%.
Click here to see our last update for the transportation giant.