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GATX Rides on Strong Liquidity Amid Coronavirus-led Woes

Zacks Equity Research
·2 mins read

We recently issued an updated report on GATX Corporation GATX.

Like many other transportation companies, GATX has been hit hard by coronavirus-induced uncertainties.

Disappointing performance in the Rail International segment in the first two quarters of 2020 raises concerns. Notably, segmental profits fell 6.1% year over year in the second quarter due to coronavirus-led shutdowns at railcar manufacturing facilities.

Nevertheless, GATX is gaining from a strong liquidity position. The company had no short-term debt obligations at the end of the second quarter of 2020. Its cash and cash equivalents at the end of the period stood at $492.9 million. Additionally, the company’s current ratio was at 4.28 at the end of the second quarter, compared with the industry’s average of 1.27.

Notably, its shareholder-friendly measures are also encouraging. GATX has an impressive record with respect to dividend payment. In January 2020, the company raised its quarterly dividend by 4.3% to 48 cents per share. On July 31, GATX announced a quarterly dividend payment of 48 cents per share payable on Sep 30 to shareholders as of record date Sep 15, 2020.

Zacks Rank & Stocks to Consider

GATX currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Zacks Transportation sector are Knight-Swift Transportation Holdings Inc. KNX, Canadian Pacific Railway Limited CP and Werner Enterprises, Inc. WERN. Knight-Swift sports a Zacks Rank #1(Strong Buy), while Canadian Pacific and Werner carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term expected earnings per share (three to five years) growth rate for Knight-Swift, Canadian Pacific and Werner is pegged at 15%, 8% and 8.5%, respectively.

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KnightSwift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
 
Canadian Pacific Railway Limited (CP) : Free Stock Analysis Report
 
Werner Enterprises, Inc. (WERN) : Free Stock Analysis Report
 
GATX Corporation (GATX) : Free Stock Analysis Report
 
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Zacks Investment Research