Knight-Swift (KNX) Rides on Dividend Amid Soft Freight Demand
Knight-Swift Transportation Holdings Inc. KNX benefits from its shareholder-friendly initiatives. The company recently announced a hike in its dividend payout. KNX’s board of directors approved a dividend hike of 14.2%, thereby raising its quarterly cash dividend from 14 cents per share to 16 cents. The raised dividend is anticipated to be paid out on Mar 25, 2024, to all its shareholders of record as of Mar 8.
The move reflects KNX’s intention to utilize free cash to enhance its shareholders’ returns. Notably, KNX has raised its quarterly dividend five times in the past five years for a 167% overall increase.
Such shareholder-friendly moves not only instill investor confidence but also impact the company’s bottom line. Partly due to these tailwinds, shares of KNX have gained 20.1% over the past three months.
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On the flip side, high costs related to driver wages, equipment, maintenance, fuel and other expenses are restricting Knight-Swift’s bottom-line growth. During 2023, salaries, wages and benefits expenses rose 14.1% year over year, while operations and maintenance expenses climbed 11.9%. With oil prices rising, escalating fuel costs are flaring up the operating costs. Total operating expenses increased 7.4% year over year to $6.80 billion. KNX expects net cash capital expenditures for 2024 in the $625-$675 million band.
Knight-Swift exited the fourth quarter of 2023 with cash and cash equivalents of $168.55 million, which is lower than its long-term debt (excluding current maturities) of $1.22 billion. This implies that the company does not have enough cash to meet its debt obligations.
Zacks Rank and Stocks to Consider
KNX currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Zacks Transportation sector are Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation WAB and SkyWest, Inc. SKYW. Each stock presently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wabtec has an expected earnings growth rate of 12.70% for 2024. WAB delivered a trailing four-quarter earnings surprise of 7.11%, on average.
The Zacks Consensus Estimate for WAB’s 2024 earnings has improved 2.9% over the past 90 days. Shares of WAB have gained 27.1% in the past year.
SkyWest's fleet-modernization efforts are commendable. The Zacks Consensus Estimate for SKYW’s 2024 earnings has improved 6.3% over the past 90 days. Shares of SKYW have surged 216.9% in the past year.
SKYW has an expected earnings growth rate of more than 100% for 2024. SKYW delivered a trailing four-quarter earnings surprise of 128.02%, on average.
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Knight-Swift Transportation Holdings Inc. (KNX) : Free Stock Analysis Report
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
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