6 Reasons Why Investors Should Add GATX to Their Portfolio
GATX Corporation GATX is benefiting from its shareholder-friendly initiatives through which it rewards its shareholders in the form of dividend payments and share repurchases.
Against this backdrop, let’s look at the factors that make this stock an attractive pick.
What Makes GATX an Attractive Pick?
An Outperformer: A glimpse at the company’s price trend reveals that the stock has had an impressive run on the bourse over the past six months. Shares of GATX have gained 8.5% over the past six months.
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Solid Zacks Rank: GATX has a Zacks Rank #2 (Buy). Our research shows that stocks with a Zacks Rank #1 (Strong Buy) or 2 offer the best investment opportunities. Thus, the company is a compelling investment proposition at the moment.
Northward Estimate Revisions:The direction of estimate revisions serves as an important pointer when it comes to the price of a stock. Over the past 90 days, the Zacks Consensus Estimate for GATX’s 2023 earnings has moved up 1.9% year over year.
Positive Earnings Surprise History: GATX has an impressive earnings surprise history. The company delivered an earnings surprise of 16.52% in the last four quarters, on average.
Earnings Expectations: Earnings growth and stock price gains often indicate a company’s prospects. For 2023 and 2024, GATX’s earnings are expected to grow 10.54% and 5.46% year over year, respectively.
Growth Factors:The gradual improvement in the North American railcar leasing market is aiding GATX’s top line. Demand for the majority of railcar types in GATX's fleet remains robust, and absolute lease rates have been increasing. For 2023, GATX anticipates the railcar leasing environment in North America to remain favorable.
Rail International’s 2023 segment profit is likely to rise as solid demand for new and existing railcars continues in Europe and India. Coupled with increased earnings from GATX Engine Leasing, Portfolio Management is expected to generate higher segment profit in 2023.
We are upbeat about GATX's measures to reward its shareholders through dividends and buybacks. On Jan 27, 2023, GATX’s board announced a 5.8% increase in the quarterly dividend, amounting to 55 cents from the previous 52 cents. Consistent dividend payouts highlight GATX's commitment to boosting shareholders’ value and underscore its strong financial condition and bright prospects.
Other Stocks to Consider
Some other top-ranked stocks from the broader Zacks Transportation sector are Copa Holdings, S.A. CPA, Alaska Air Group, Inc. ALK and American Airlines AAL. Copa Holdings presently sports a Zacks Rank #1, whileAlaska Air and American Airlines currently carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Copa Holdings has an expected earnings growth rate of 39.83% for the current year. CPA delivered a trailing four-quarter earnings surprise of 33.35%, on average.
The Zacks Consensus Estimate for CPA’s current-year earnings has improved 21.1% over the past 90 days. Shares of CPA have soared 13.3% over the past three months.
Alaska Air has an expected earnings growth rate of 32.64% for the current year. ALK delivered a trailing four-quarter earnings surprise of 8.98%, on average.
The Zacks Consensus Estimate for ALK’s current-year earnings has improved 11.4% over the past 90 days. Shares of ALK have soared 0.8% over the past three months.
AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 7.79%, on average.
The Zacks Consensus Estimate for AAL’s current-year earnings has improved 31.1% over the past 90 days. Shares of AAL have gained 15.8% over the past three months.
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