The 3 Best Transportation Stocks to Buy Now: September 2023
Transportation is a classic contender in the investment realm that often goes unnoticed. It might not have the glitz of newer sectors, but it stitches together over 5% of the U.S. GDP, translating to $1.3 trillion annually. For savvy investors, the search for the best transportation stocks begins here, blending tradition with tremendous potential.
Moreover, even in the face of economic drizzles, some transportation companies sail smoothly, showing us their tenacity. While the broader stock market might occasionally catch a cold, those in the know are spotting golden opportunities. Among those are transportation stocks with rock-solid foundations.
Furthermore, shopping sprees are set for a comeback as consumers’ wanderlust for experiences settles down. For savvy investors, this hints at transportation giants focused on the movement of goods, especially those with tempting valuations. So, buckle up as we journey through three transportation stocks poised for a rewarding ride.
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Uber (UBER)
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Uber (NYSE:UBER) has revved up to become the poster child of disruptive innovation. Displacing traditional taxis and pioneering the ride-sharing movement, Uber has effectively reshaped the dynamics of city transportation.
But Uber didn’t just stop at dropping you off at your destinations. Their progressive business plan brings food to your doorstep with Uber Eats. To go a mile further, they have revamped logistics with Uber Freight and Uber Business.
The recent financial figures only underscore its relentless drive forward. Though its Q2 revenue of $9.23 billion narrowly missed projections, its net income of $394 million (or 18 cents per share) stole the show. In contrast was a staggering loss of $2.6 billion for the same quarter.
It reported its first-ever quarterly operating profit of $326 million, along with a roaring free cash flow growth to $1.14 billion. This represents a near 200% bump from the prior year. Now, while it may not be rubbing shoulders with the elites in the S&P 500 just yet, the winds suggest it’s prepping its grand entrance. Given its solid performances, it’s undeniably one of the season’s most unexpected yet delightful surprises.
Canadian National Railway (CNI)
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Canadian National Railway (NYSE:CNI) stands out as a robust pillar in the North American railroad landscape, bridging key territories across Canada and the midwestern U.S. Over the past decade, it has proven to be an excellent wealth compounder, delighting shareholders with a substantial 126% bump in its share price.
It recently posted mixed earnings in its second-quarter, locking revenues at 4.06 billion CAD and grappling with an 8% drop in earnings-per-share compared to the prior year. However, the quarter was marred by a confluence of Canadian wildfires and economic ripples, viewed as transient clouds on CNI’s horizon. Nevertheless, it still posted a budding 10% uptick in free cash flow, a testament to the company’s resiliency.
As we shift our gaze to the future, CNI holds a buoyant vision, forecasting potent growth between 10% to 15% in long-term earnings per share. Moreover, it promises 14.4% upside and a comforting 2.07% dividend yield.
Boeing Co. (BA)
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Boeing Co. (NYSE:BA), a titan in aerospace, is soaring to new heights.
The aviation behemoth is renowned for its cutting-edge commercial jets and formidable defense systems. It posted an impressive Q2 revenue of $19.75 billion, eclipsing the projected $18.57 billion. This uptick can be credited to various factors, chiefly the resurgence in passenger traffic across the U.S., Europe, and Asia in the post-pandemic era.
Furthermore, despite the headwinds stemming from supply chain hiccups and the recent blip around the Boeing 737 MAX, the company’s trajectory remains skyward. A testament to this is the 12% jump in deliveries and a healthy 41% surge in revenues during its second-quarter. Pivoting to China, recent developments have bolstered Boeing’s standing, marking a rebound from earlier setbacks. Given these indicators, Boeing’s flight path looks set on a promising horizon.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines
Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.
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