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Here's Why You Should Give the Ryder (R) Stock a Shot Now

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·3 min read
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Ryder System R is benefiting from improving economic and freight market conditions in the United States. Strong segmental performances are boosting the company’s top line (up 14.8% year over year in 2021). Revenues at Fleet Management Solutions rose 10% year over year to $5,678.9 million in 2021, driven by higher rental revenues on strong demand and favorable pricing. The Supply-Chain Solutions and Dedicated Transportation Solutions segments’ total revenues surged 24% and 19% to $3,154.8 million and $1,457.2 million, respectively, in 2021, owing to new business, favorable pricing and higher volumes.

Strong demand and pricing in used-vehicle sales and rentals are also aiding Ryder’s performance. Backed by this tailwind, the company provided a bullish outlook for 2022. It expects total revenues as well as operating revenues to increase by approximately 10% each in 2022. Adjusted earnings per share for the full year are estimated to be $11-$12. This indicates an increase of 15-25% from the 2021 reported figure.

Ryder’s measures to reward its shareholders through dividends and share buybacks are encouraging. In February 2022, the company entered into a $300-million accelerated share repurchase program, which will run through October 2022. Previously, in October 2021, R authorized a new share repurchase program to buy back up to 2 million shares of common stock, at its discretion, from Oct 14, 2021 through Oct 14, 2023. In July 2021, the company had announced a 3.6% hike in its quarterly dividend payout to 58 cents per share.

Ryder System, Inc. Price and Consensus

Ryder System, Inc. Price and Consensus
Ryder System, Inc. Price and Consensus

Ryder System, Inc. price-consensus-chart | Ryder System, Inc. Quote


In light of the abovementioned positives, we believe investors should add the Ryder stock to their portfolios now, as is suggested by its Zacks Rank #1 (Strong Buy). With freight market conditions and rental environment expected to remain buoyant as the economy continues to recover, R is likely to continue to thrive in 2022. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Ryder’s first-quarter 2022 earnings has been revised upward by 11.3% in the past 60 days. The same for 2022 earnings has been revised northward by 24.8%.

Other Key Picks

Some other top-ranked stocks within the broader Transportation sector are as follows:

Textainer Group TGH sports a Zacks Rank #1. The company has an impressive earnings surprise history, having outperformed the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 21.6%.

Shares of Textainer Group have gained more than 40% in a year’s time.

ArcBest Corporation ARCB flaunts a Zacks Rank #1. The company’s earnings have trumped the Zacks Consensus Estimate in each of the preceding four quarters, the average beat being 31.4%.

Shares of ArcBest have rallied more than 41% in a year’s time.


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Ryder System, Inc. (R) : Free Stock Analysis Report

ArcBest Corporation (ARCB) : Free Stock Analysis Report

Textainer Group Holdings Limited (TGH) : Free Stock Analysis Report

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Zacks Investment Research