Trucking stocks have become increasingly popular investments as they are considered safe and reliable sources of incomeThe income statement provides a summary of a company's revenue and expenses over a specified period of time, typically a year or a quarter. It shows the company's total revenue, th.... With trucking stocks, you can benefit from both the potential of capital appreciation and dividend yields. Investing in trucking stocks can be an excellent way to diversify your portfolio and earn consistent returns.
Rolling in the Dough: Navigating the Trucking Stocks
The trucking sector can be broken down into several categories, including long haul trucking, short haul trucking, trucking brokers, and truck manufacturers. While each type of trucking stock has its own unique characteristics and benefits, all of them can be used to generate significant returns. It is important to research each type of trucking stock carefully and understand the risks associated with investing in them.
Moreover, investors should also be aware of the underlying economic trends that affect the trucking industry. The demand for freight services is closely linked to the health of the overall economy. When the economy is doing well, the demand for trucking services increases, and vice versa. Thus, it is essential to pay close attention to macroeconomic indicators when investing in trucking stocks.
Driving Ahead: Picking the Best Trucking Investments
When it comes to picking the best trucking investments, there are a few key factors to consider. The most important one is to identify the companies with the strongest balance sheets. Companies that are able to consistently generate cash flows and maintain healthy capital structures are more likely to be resilient in a downturn.
Furthermore, investors should also look for companies with a history of paying dividends. Companies that have a record of paying out dividends tend to be well-run and have a strong management team in place. Investors should also consider the liquidity of the stock, as it will affect the stock’s ability to trade at its fair value.
Finally, it is important to pay attention to the valuation of the stock. Many trucking stocks are currently trading at attractive levels due to their high dividend yields. This makes them attractive for income-seeking investors.
Universal Logistics Holdings (ULH)
The stock is in a technical strong uptrend. Universal Logistics Holdings provides transportation and logistics solutions in the United States, Mexico, Canada and Colombia. It offers transportation services that include dry van, flatbed, heavy haul and freezer operations; domestic and international freight transport and customs brokerage services; and last mile and ground acceleration services. The company transports a variety of goods that include auto parts, machinery, construction materials, paper, food, consumer goods, furniture, steel and other metals. Valuation: P/E = 7.2, Forward P/E = 7.14, Price to Sales = 0.52
Covenant Logistics Group (CVLG)
The stock is in a technical weak uptrend. The stock is up nearly 100% from its April 2022 lows! Covenant Logistics Group provides transportation and logistics services in the United States. It operates in four segments: Expedited, Dedicated, Managed Freight and Warehousing. The Expedited segment primarily provides transportation services with high standards of freight service and delivery, such as 1,000 miles in 22 hours or 15 minutes. The Dedicated segment offers customers dedicated transportation capacity during contract periods using own or leased equipment. The Managed Freight segment offers brokerage services, including logistics capacity through the outsourcing of customer transportation to third parties; and transportation management services, such as contract logistics services for customers looking to outsource their logistics needs. Valuation: P/E = 4.7, Forward P/E = 8, Price to Sales = 0.37
Marten Transport (MRTN)
The stock is in a technical strong uptrend. The stock did a Symmetrical TriangleThe symmetrical triangle pattern is one of the most popular chart patterns in the world of technical analysis. This pattern is a result of the convergence of two lines that form a ... Breakout back on January 25, 2023, but is now rolling over on profit taking. Marten Transport operates as a temperature sensitive truck carrier for shippers in the United States, Canada and Mexico. It operates in four segments: Truckload, Dedicated, Intermodal and Brokerage. The Truckload segment delivers food and other packaged goods to consumers who require temperature-controlled or insulated environments. The Dedicated segment offers customized transportation solutions for individual customer needs with temperature-controlled trailers, dry vans and other specialized equipment. The intermodal segment transports freight to customers using refrigerated containers and temperature-controlled semi-trailers on rail flatbeds for parts of the journey, as well as using tractors and contract carriers. Valuation: P/E = 16, Forward P/E = 15, Price to Sales = 1.42
Waste Connections (WCN)
The stock is in a technical downtrend. Waste Connections provides non-hazardous collection, transportation, disposal and recovery services in the United States and Canada. It offers collection services to residential, commercial, municipal, industrial and exploration and production (E & P) customers; waste disposal services; and recycling services for a variety of recyclable materials, including compost, cardboard, mixed paper, plastic containers, glass bottles, and ferrous and aluminum metals. The Company also owns and operates transfer stations that receive compacted and/or loaded waste to be transported to a landfill or processing facilities by truck, rail or barge; and intermodal rail freight and solid waste services in the Pacific Northwest through a network of intermodal facilities. In addition, it provides E&P waste treatment, recovery and disposal services for oil and gas exploration and production wastes such as drilling fluids, drilling cuttings, completion fluids and flowing water; production waste and produced water during well operation; contaminated soils requiring treatment during site reclamation; and substances that require cleanup after a spill, cleanup of a reserve pit, or burst pipe. Valuation: P/E = 43, Forward P/E = 31, Price to Sales = 4.93
Landstar System (LSTR)
The stock is in a technical strong uptrend. Landstar System provides integrated traffic management solutions in the United States, Canada, Mexico and internationally. The company operates in two segments: Transport logistics and insurance. The Transportation Logistics segment offers a variety of transportation services, including truckload and less freight, intermodal rail, air freight, ocean, express ground delivery and mission-critical air delivery. Cross-border, intra-Mexico, intra-Canadian US-Mexico, project freight and customs brokerage, as well as providing transportation services to other carriers such as third-party logistics, small package and less than freight service providers. It provides transportation services through dry and specialized vans of various sizes, flatbed trailers, temperature-controlled fans and containers; intermodal rail services through contracts with domestic and Canadian railways; and air and sea services through contracts with domestic and international airlines and ocean liners. Valuation: P/E = 15, Forward P/E = 18, Price to Sales = 0.88
Heartland Express (HTLD)
The stock is in a technical strong uptrend. Heartland Express operates as a short- to medium-haul carrier in the United States and Canada. Primarily provides nationwide dry truck loading services for shippers from Washington to Florida and New England to California; and temperature controlled truck service. The company offers its services under the brands Heartland Express and Millis Transfer. It mainly serves retailers and manufacturers of consumer goods, appliances, food products and the automotive industry. Valuation: P/E = 9, Forward P/E = 15, Price to Sales = 1.81
TFI Interntional (TFII)
The stock is in a technical strong uptrend. TFI International provides shipping and logistics services in the United States, Canada and Mexico. The company operates through Parcel and Courier, Less-Than-Truckload (LTL), Truckload (TL) and Logistics segments. The Parcel and Courier segment deals with the collection, transport and delivery of goods. The LTL segment deals with the purchase, consolidation, transportation and distribution of small loads. The TL segment offers express transport, flatbeds, tank containers and specialized services such as TL brokerage services. This segment transports full loads directly from the customer to the destination by enclosed van or special equipment. Valuation: P/E = 9.8, Forward P/E = 16, Price to Sales = 1.2
Final Thoughts
Trucking stocks are solid investments that offer both capital appreciation and dividend yields. Investors should research each type of trucking stock carefully before investing and be aware of the macroeconomic factors that could affect the industry. Furthermore, investors should also consider the company’s financials, dividend history, and stock liquidity. With the right research and due diligence, investors can find the best trucking investments that can generate consistent returns.
