The Russia-Ukraine war has aggravated logistical disruptions this year. However, sustained demand for transportation and logistics solutions in a wide range of industries, including oil and gas, construction, mining, manufacturing, and chemicals, is driving the trucking industry’s growth in the United States. As oil prices decline following a record oil reserve release announced by the Biden administration yesterday, freight transportation volumes are expected to rise significantly in the near term.
According to a report by QYResearch, the global freight trucking market is expected to reach 1.1 trillion by 2027, growing at a 3% CAGR. The robust growth in the e-commerce sector post-pandemic and increasing international trade agreements between countries have aided the growth of the freight trucking market. The trucking industry is the backbone of the U.S. economy. Nearly 70% of freight transportation will be handled by the trucking sector in 2022.
Given the high demand and soaring costs, we think it could be wise to invest in quality trucking stocks Schneider National, Inc. (SNDR), Werner Enterprises, Inc. (WERN), ArcBest Corporation (ARCB), Marten Transport, Ltd. (MRTN), and Heartland Express, Inc. (HTLD). These names all have promising growth prospects.
Schneider National, Inc. (SNDR)
SNDR provides surface transportation and logistics solutions in the U.S., Canada, and Mexico. The Green Bay, Wisc., company operates in three segments: Truckload; Intermodal; and Logistics. SNDR offers long-haul and regional shipping services, door-to-door container on flat car services, freight brokerage, and import/export services.
This January, SNDR announced that its board of directors declared an $0.08 per share quarterly cash dividend on its Class A and Class B common stock, which is expected to be paid on April 8, 2022.
Last December, SNDR acquired Midwest Logistics Systems, Ltd. “We acquired 100% of the equity interest in Midwest Logistics Systems, Ltd., a leading dedicated carrier in the central United States. With the acquisition of MLS, we are on track to generate $1 billion in dedicated revenues,” stated Mark B. Rourke, CEO and president of SNDR.
In its fiscal year 2021 fourth quarter, ended Dec. 31, 2021, SNDR's operating revenues increased 24.5% year-over-year to $1.57 billion. Its adjusted income from operations improved 66.5% from the prior-year period to $177 million. And SNDR’s adjusted net income rose 74.7% year-over-year to $135.90 million, while the company's adjusted earnings per share rose 72.7% year-over-year to $0.76.
The $1.56 billion consensus revenue estimate for its fiscal year 2022 first quarter, ended March 31, 2022, represents 27% growth of 27% from the same period in 2021. The $0.52 consensus EPS estimate for the to-be-reported quarter indicates a 68.3% year-over-year rise. It is no surprise that SNDR has surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock gained marginally over the past year and closed yesterday's trading session at $25.50.
SNDR's POWR Ratings reflect this promising outlook. It has an overall B grade, which equates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
SNDR has a grade of B for Growth, and Momentum. Within the B-rated Trucking Freight industry, it is ranked #6 of 22 stocks.
To see additional POWR Ratings (Stability, Value, Quality, and Sentiment) for SNDR, click here.
Werner Enterprises, Inc. (WERN)
WERN in Omaha, Neb., is a transportation and logistics company. It transports truckload shipments of commodities in interstate and intrastate commerce in the U.S., Mexico, and internationally. The company operates through two segments: Truckload Transportation Services; and Werner Logistics. The company has a fleet of more than 8,340 trucks, 27,225 company-owned trailers, and 55 intermodal drayage trucks.
WERN's total revenues increased 23.4% year-over-year to $765.22 million in its fiscal 2021 fourth quarter, ended Dec.31, 2021. WERN’s adjusted operating income improved 22.2% year-over-year to $101.10 million. Its adjusted net income attributable to Werner increased 23% from its year-ago value to $75.62 million. The company’s adjusted earnings per share rose 27% year-over-year to $1.13.
Analysts expect WERN's revenue for its fiscal year 2022 first quarter, ended March 31, 2022, to come in at $747.22 million, representing a 21.2% rise year-over-year. The Street expects the company's EPS for the to-be-reported quarter to come in at $0.86, representing a 26.2% increase year-over-year.
WERN stock has declined 14% in price year-to-date and closed yesterday's trading session at $41.00.
The POWR Ratings give WERN a B grade for Growth and Momentum. Within the Trucking Freight industry, it is ranked #11 of 22 stocks.
To see additional component grades of POWR Ratings (Stability, Quality, Value, and Sentiment) for WERN, click here.
ArcBest Corporation (ARCB)
ARCB is a freight transportation and logistics company. The Fort Smith, Ariz., company operates through three segments: Asset-Based; ArcBest; and FleetNet. ARCB provides transportation services for general commodities, motor carrier transportation services to customers in Mexico, and expedited freight transportation services to commercial and government customers.
Last November, ARCB acquired MoLo Solutions, LLC, a Chicago-based truckload freight brokerage. The acquisition might boost the company’s revenue streams and enhance its business growth.
In the fiscal 2021 fourth quarter, ended Dec.31, 2021, ARCB's revenues increased 45.2% year-over-year to $1.19 billion. The company's operating income grew 187.4% year-over-year to $86.94 million. ARCB’s net income and earnings per common share came in at $65.49 million and $2.47, respectively, registering an increase of 173.8% and 177.5% from the prior-year period.
The $1.25 billion consensus revenue estimate for its fiscal year 2022 first quarter, ended March 31, 2022, represents 50.4% year-over-year growth. The $2.08 consensus EPS estimate for the first quarter represents a 105.5% rise from the year-ago value. ARCB has surpassed the consensus EPS estimates in each of the trailing four quarters.
The stock improved 11.8% in price over the past year. It closed yesterday's trading session at $80.50.
ARCB’s POWR Ratings reflect a strong outlook. The stock has an overall B rating, which translates to Buy in our POWR Ratings system.
ARCB has an A grade for Growth and a B for Momentum and Value. It is ranked #5 in the Trucking Freight industry.
Click here to see ARCB’s POWR Ratings for Stability, Sentiment, and Quality.
Note that ARCB is one of the few stocks handpicked currently in the Reitmeister Total Return portfolio. Learn more here.
Marten Transport, Ltd. (MRTN)
MRTN operates as a temperature-sensitive truckload carrier for shippers in the U.S., Canada, and Mexico. The Mondovi, Wisc., company operates through the following segments: Truckload; Dedicated; and Intermodal Brokerage. MRTN operates a fleet of more than 3,204 tractors, 3,111 company-owned tractors, and 93 tractors supplied by independent contractors.
On March 1, MRTN’s board of directors declared a 33.3% increase in the company’s quarterly cash dividend to $0.06 per share of common stock. This reflects the company’s improved performance.
On February 15, MRTN announced the expansion of its dry truckload operations into Mexico. The company has begun hauling dry van products between Mexico and the U.S. This added dry van transportation service solution for MRTN’s customers is expected to enhance the company’s business growth.
MRTN's operating revenue increased 17.4% year-over-year to $266.88 million in its fiscal year 2021 fourth quarter, ended Dec.31, 2021. MRTN’s operating income improved 20% year-over-year to $30.68 million. Its income before income taxes rose 20% year-over-year to $30.70 million. The company’s net income increased 26.1% from its year-ago value to $24.73 million. And its earnings per common share rose 25% year-over-year to $0.30.
The $260.22 million consensus revenue estimate for its fiscal 2022 first quarter, ended March 30, 2022, represents 16.7% growth from the same period in 2021. The $0.26 consensus EPS estimate for the to-be-reported quarter indicates an 18.2% year-over-year rise. The company has an impressive earnings surprise history; it has surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of MRTN have increased 3.5% year-to-date and 3.2% over the past year. It closed yesterday's trading session at $17.76.
MRTN's strong fundamentals are reflected in its POWR Ratings. The stock has an overall B grade, which equates to Buy in our proprietary rating system.
MRTN also has a B grade for Momentum and Stability. Within the Trucking Freight industry, it is ranked #7.
To see additional POWR Ratings (Growth, Value, Quality, and Sentiment) for MRTN, click here.
Heartland Express, Inc. (HTLD)
HTLD is a holding company that operates as a short-to-medium-haul truckload carrier in the U.S. and Canada. North Liberty, Iowa-based HTLD provides asset-based dry van truckload services and temperature-controlled truckload services for shippers. It serves retailers and manufacturers in the consumer goods and automotive industries.
In the fiscal year 2021 fourth quarter, ended Dec. 31, 2021, HTLD's operating income increased 11.5% year-over-year to $26.50 million. Its income before income taxes grew 11.5% year-over-year to $26.65 million. The company’s net income and earnings per share came in at $20.33 million and $0.26, respectively, registering an increase of 15.1% and 18.2% from the prior-year period.
Analysts expect HTLD's EPS for its fiscal year 2022 first quarter, ended March 31, 2022, to come in at $0.20, representing a 20.5% rise year-over-year. The company has an impressive earnings surprise history; it has surpassed the consensus EPS estimates in three of the trailing four quarters.
The stock declined 16.4% in price over the past three months. It closed yesterday’s trading session at $14.07.
HTLD has a grade of B for Momentum and Stability. It is ranked #12 of 22 stocks in the Trucking Freight industry.
Click here to see HTLD ratings for Growth, Quality, Sentiment, and Value.
SNDR shares were trading at $23.60 per share on Friday afternoon, down $1.90 (-7.45%). Year-to-date, SNDR has declined -12.03%, versus a -4.50% rise in the benchmark S&P 500 index during the same period.
About the Author: Mangeet Kaur Bouns
Mangeet’s keen interest in the stock market led her to become an investment researcher and financial journalist. Using her fundamental approach to analyzing stocks, Mangeet’s looks to help retail investors understand the underlying factors before making investment decisions.
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