Planes, trains and automobiles. They’re what makes the world go round and they drive businesses large and small. Transportation stocks tend to be consistent gainers for shareholders, managing to perform well in most economic environments and regardless of what is happening in the broader market. The S&P Transportation Index is up 12% in the last 12 months compared to a 21% gain in the benchmark S&P 500 index.
Many individual transportation stocks have outperformed the overall market and by a wide margin. Some transportation stocks have more than tripled in the last year alone. That’s impressive given that stocks of trucking companies, airlines, and automotive dealers tend to be viewed as old economy trades and are not seen as high-flying growth stocks such as the tech giants. Many transportation stocks also pay strong dividends. Here is steering your portfolio: three transportation stocks in the fast lane.
Old Dominion Freight Line (ODFL)
Old Dominion Freight Line (NASDAQ:ODFL) is a premier American trucking company. The company transports goods around the country, notably shipping containers from the nation’s ports. The company also operates a household moving service. All told, Old Dominion operates nearly 6,000 trucks and 22,500 trailers. The company is celebrating its 90th anniversary this year, employs 23,000 people, and has annual revenues of more than $4 billion.
ODFL stock has been a long-term and consistent compounder for shareholders, having risen 11% this year, 30% in the last 12 months, and 330% over the past five years. Key to Old Dominion’s success has been its steady and careful growth, along with consistently strong financial results. Old Dominion Freight Line just completed a two-for-one stock split on March 27, making the shares more affordable for investors to buy. ODFL stock also pays a quarterly dividend of 26 cents a share for a yield of 0.47%.
Delta Air Lines (DAL)
Delta Air Lines (NYSE:DAL) is the second largest carrier in America based on the number of flights scheduled each day. The company was the first U.S. airline to come out with its first quarter 2024 earnings, and the results were impressive. Notably, Delta swung to a profit and announced record sales for Q1 as global travel demand gains ground. The carrier reported earnings per share of 45 cents versus 36 cents, which was forecast on Wall Street.
Revenue in the first quarter of 2024 totaled $12.56 billion, slightly below Wall Street forecasts of $12.59 billion but a first-quarter record for the company. In releasing its Q1 results, Delta said that it is benefitting from strong bookings for both leisure and business travel as we progress through 2024. For all of this year, Delta reiterated its full-year forecast of $6 to $7 a share in earnings and free cash flow of $3 billion to $4 billion. DAL stock is up 35% over the last 12 months, including a 15% gain this year.
Carvana (CVNA)
Carvana’s (NYSE:CVNA) stock has been a rocket ship over the last year, having risen 677% in the past 12 months. So far this year, CVNA stock is up 44%, including a 33% gain after the used car retailer reported its first-ever profit in February. Investors stood up and cheered after the company announced a profit of $450 million for all of 2023. In 2022, Carvana reported a loss of $1.59 billion. The company also forecast a profit for this year’s first quarter of about $100 million. Carvana reports Q1 results on May 1.
To reach profitability, Carvana cut costs by lowering its inventory and reducing its advertising budget. The company, which allows customers to buy cars online, was popular during Covid-19 lockdowns but has struggled coming out of the pandemic. The company said in its last earnings print that it expects the number of used vehicles it sells in Q1 of this year to be higher than last year. To be sure, CVNA stock remains volatile, but its growth over the past year has been hard to ignore.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
