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The railroad industry is currently undergoing a period of change and transition. In recent years, railroad companies have been investing heavily in new technologies and infrastructure improvements. This has led to more efficient operations and improved safety records. However, these investments have also made the industry more vulnerable to economic downturns. As a result, railroad companies are facing pressure to cut costs and improve their bottom lines.

In response, many railroad companies have implemented layoffs and other cost-cutting measures. This has led to increased tension between labor and management, as well as between different railroad companies. Despite these challenges, the railroad industry remains an important part of the American economy. With that being said, railroad stocks have been a popular investment among stock market investors for many years, and they offer a number of advantages.

First, railroad companies tend to be very stable and generate consistent profits. This makes them an ideal investment for investors who are looking for long-term growth. Additionally, railroad stocks tend to pay high dividends, which can provide investors with a valuable source of income. However, it is important to keep in mind that railroad stocks are not without risk. Considering all of this, here are two top railroad stocks to check out in the stock market now.

Railroad Stocks To Buy [Or Avoid] Right Now

1. Union Pacific Corporation (UNP Stock)

First up, Union Pacific Corporation (UNP) is one of the largest railroad operators in the United States. The company’s Union Pacific Railroad subsidiary operates 32,000 miles of track in 23 states, linking major West Coast and Gulf Coast ports to eastern gateways.

UNP Recent Stock News

In September, Union Pacific Corporation announced that it will be releasing its 3rd quarter 2022 financial results. In detail, the company said it will report its Q3 2022 results on Thursday, October 20, 2022, before the market opens. While we wait for that, let’s take a look back at how UNP did in the second quarter of 2022.

Back in July, Union Pacific Corporation reported a beat for its second-quarter 2022 earnings results. Diving in, the company posted 2nd quarter 2022 earnings of $2.93 per share with revenue of $6.3 billion. Meanwhile, UNP reported revenue growth of 13.9% during the same period in 2021. Additionally, the company reported that repurchased approximately $722 million in share repurchases in the second quarter of 2022.

Furthermore, Lance Fritz, Union Pacific President, and CEO at UNP said this in their letter to shareholders, “We also experienced record high fuel prices and increasing inflation, adding pressure to our total costs. Offsetting the cost pressures were higher fuel surcharge revenue, solid core pricing, a positive mix, and continued train size initiatives. The result was operating revenue and income growth. Our network fluidity improved through the quarter, and we are positioned to grow volumes in the back half of 2022 while continuing to improve our service product.

UNP Stock Chart

As of Tuesday’s mid-morning, shares of UNP stock are up 1.35% at $203.00 a share. With Union Pacific gearing up to announce Q3 2022 earnings results, could now be a good time to add UNP stock to your watchlist?

railroad stocks (UNP stock)
Source: TD Ameritrade TOS

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2. Trinity Industries Inc. (TRN Stock)

Next, Trinity Industries Inc. (TRN) is a U.S based provider of rail transportation products and services. In brief, the company sells and leases railroad products and railcar maintenance services throughout North America. As it stands, the company currently offers its shareholders an annual dividend yield of 3.90%.

TRN Recent Stock News

Just last month, TRN announced that its Board of Directors has declared a quarterly dividend of $0.23 per share on common stock. Moreover, this dividend payment represents the company’s 234th consecutive dividend payment to its shareholders.

Aside from that, On Monday the company announced it has entered into a new long-term railcar supply agreement with GATX Corporation. Diving in, the details of the deal include, TRN will deliver a mix of 15,000 newly built tank and freight railcars over a six-year period. In addition, Trinity will deliver 6,000 tank cars at a rate of 1,200 cars annually from 2024 through 2028. What’s more, the remaining 9,000 cars, will be ordered at a rate of 1,500 cars per order year from 2023 to 2028. The deal is valued at $1.8 billion for Trinity Industries.

Jean Savage, Trinity’s President, and CEO commented, “This multi-year railcar order with GATX represents the extension of a strong partnership. We are proud of the relationship we have built with GATX and pleased that they have once again selected TrinityRail as the premier North American railcar manufacturer.

TRN Stock Chart

Following this announcement from the company, shares popped during Monday’s trading day by over 6%. Meanwhile, during Tuesday’s mid-morning trading session, TRN stock is up another 1.66% on the day at $23.22 a share. Given this announcement, do you think now is the time to invest in TRN stock?

TRN stock chart
Source: TD Ameritrade TOS

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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