The Zacks Transportation - Equipment and Leasing industry is suffering from headwinds like raging inflation, higher interest rates, supply-chain disruptions and high operating costs. These headwinds are likely to hurt the demand for containers.
Despite these headwinds, the industry has gained 11.4% over the past six months, outperforming the S&P 500 Index’s 9% appreciation and a 0.5% jump of the broader Zacks Transportation sector.
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Given this encouraging backdrop, it would be a wise decision to invest in some dividend-paying companies like Ryder System, Inc. R, Triton International Limited (TRTN) and Air Lease CorporationAL from the Transportation - Equipment and Leasing industry. These companies have consistently announced dividend hikes, thus highlighting their pro-shareholder stance.
Stocks that have a strong history of dividend growth belong to mature companies, which are less susceptible to large swings in the market, and act as a hedge against economic or political uncertainty as well as stock market volatility. At the same time, they offer downside protection with their consistent increase in payouts.
Additionally, these companies have superior fundamentals like a sustainable business model, a long track of profitability, rising cash flows, good liquidity, a strong balance sheet and some value characteristics.
How to Pick Stocks With Solid Dividend Payouts?
In order to choose some of the best dividend stocks from the industry, we have run the Zacks Stock Screener to identify stocks with a dividend yield in excess of 2% and a sustainable dividend payout ratio of less than 60%.
Ryder: Headquartered in Miami, FL, it operates as a logistics and transportation company worldwide. Ryder pays out a quarterly dividend of 71 cents ($2.84 annualized) per share, which gives it a 2.74% yield at the current stock price. This company’s payout ratio is 17%, with a five-year dividend growth rate of 3.04%. (Check Ryder’s dividend history here). Ryder presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Ryder System, Inc. Dividend Yield (TTM)
Ryder System, Inc. dividend-yield-ttm | Ryder System, Inc. Quote
We are impressed with Ryder’s consistent efforts to reward its shareholders through dividends and share repurchases. In July 2023, Ryder announced a 14.5% hike in its quarterly dividend, taking the total to 71 cents per share (annualized $2.84). The company is also active on the buyback front. In February 2023, Ryder’s board approved a new 2-million share discretionary repurchase program. The management is now authorized to buyback up to 2 million shares of common stock at its discretion from Feb 10, 2023, through Feb 10, 2025 (two years).
Triton: Headquartered in Hamilton, Bermuda, Triton engages in the acquisition, leasing, re-leasing, and sale of various types of intermodal containers and chassis to shipping lines, and freight forwarding companies and manufacturers. Triton currently carries a Zack Rank #2 (Buy).
Triton pays a quarterly dividend of 70 cents ($2.80 annualized) per share, giving it a 3.38% yield at the current stock price. This company’s payout ratio is 27%, with a five-year dividend growth rate of 7.75%. (Check Triton’s dividend history here).
Triton International Limited Dividend Yield (TTM)
Triton International Limited dividend-yield-ttm | Triton International Limited Quote
We are impressed with Triton's efforts to reward its shareholders through dividends and buybacks. Concurrent with its third-quarter 2022 earnings release, Triton's board of directors increased its quarterly cash dividend from 65 cents per share to 70 cents, indicating a dividend hike of 8%. The company is also active on the buyback front. During the first half of 2023, TRTN repurchased 1,884,616 shares for a total cost of $125.7 million.
Air Lease: Headquartered in Los Angeles, CA, Air Lease operates as an aircraft leasing company engaged in purchasing and leasing of commercial jet aircraft to airlines worldwide. AL pays out a quarterly dividend of 20 cents ($0.80 annualized) per share, which gives it a 2.03% yield at the current stock price. This company’s payout ratio is 19%, with a five-year dividend growth rate of 12.55%. (Check AL’s dividend history here). Air Lease presently carries a Zack Rank #3 (Hold).
Air Lease Corporation Dividend Yield (TTM)
Air Lease Corporation dividend-yield-ttm | Air Lease Corporation Quote
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