Yahoo Finance 6 Reasons Why Investors Should Buy C.H. Robinson (CHRW) Stock
C.H. Robinson Worldwide, Inc. CHRW is currently benefiting from improving freight market conditions and strong investor-friendly measures.
Against this backdrop, let’s look at the factors that make this stock an attractive pick.
An Outperformer: C.H. Robinson has risen 6.8% in the past year against the industry’s decline of 21.5%.
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Solid Rank: C.H. Robinson currently sports a Zacks Rank #1 (Strong Buy). Our research shows that stocks with a Zacks Rank of 1 or 2 offer attractive investment opportunities. You can see the complete list of today’s Zacks #1 Rank stocks here.
Northward Estimate Revisions: Nine estimates for 2022 have moved upward in the past 60 days, indicative of analysts’ confidence in the stock. The Zacks Consensus Estimate for 2022 earnings has moved up 13.9% in the past 60 days.
Positive Earnings Surprise History: C.H. Robinson has an encouraging earnings surprise history. Earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark once), the average surprise being 17.1%.
Strong Prospects: The Zacks Consensus Estimate for 2022 earnings is pegged at $7.21, implying growth of 14.3% from the year-ago reported figure. C.H. Robinson’s long-term expected earnings per share (EPS) growth rate is 9%.
Driving Factors: C.H. Robinson’s measures to reward its shareholders through dividends and share buybacks are encouraging. In December 2021, CHRW hiked its dividend to 55 cents per share (annually: $2.20) from 51 cents (annually: $2.04). Its board also boosted the share repurchase authorization by an additional 20 million shares.
Last year, CHRW returned approximately $886 million to its shareholders through a combination of dividends ($277 million) and share buybacks ($609 million). Continuing its shareholder-friendly approach, C.H. Robinson returned $250.6 million to its shareholders in the first quarter through a combination of cash dividends ($72.9 million) and share repurchases ($177.7 million).
With improved freight market conditions, C.H. Robinson is benefiting from higher pricing and volumes across most of its service lines. Total revenues jumped 42.5% year over year in 2021, with higher revenues across all segments. In first-quarter 2022, the top line improved 41.8% owing to favorable truckload pricing to customers and handsome profits in ocean freight.
High freight rates aided results. At (North American Surface Transportation) NAST, total revenues were $4.1 billion (up 28.1% year over year). Segmental revenues benefited from higher truckload and less-than-truckload (LTL) pricing as well as increased truckload shipments. Total revenues at Global Forwarding were $2.2 billion, up more than 89% year over year. Results were boosted by higher pricing and volume in CHRW’s ocean and air services.
Other Stocks to Consider
Investors interested in the Zacks Transportation sector can also consider stocks like Southwest Airlines LUV, GATX Corporation GATX and Golar LNG Limited GLNG.
GATX has a trailing four-quarter surprise of 40.8%, on average, with its earnings having surpassed the Zacks Consensus Estimate in all the last four quarters. We are upbeat about GATX's efforts to reward its shareholders despite coronavirus-led woes. In January this year, GATX raised its quarterly dividend 4% to 52 cents per share. The hiked dividend highlights its commitment to boost shareholder value as well as underscores its strong financial condition and bright prospects.
Driven by the tailwinds, the stock has risen 8.8% in the past year. GATX currently carries a Zacks Rank #2 (Buy).
The long-term expected earnings per share (EPS) (three-to-five years) growth rate for Southwest Airlines is pegged at 6%. Continued recovery in air-travel demand bodes well for Southwest Airlines. Anticipating a continued improvement in bookings, the carrier expects to reap profits in the remaining three quarters of 2022 as well as for the full year.
Driven by the positives, the stock has increased marginally in the year-to-date period. LUV currently sports a Zacks Rank #1.
Golar LNG has a trailing four-quarter surprise of 50%, on average, with its earnings having surpassed the Zacks Consensus Estimate in three of the last four quarters (one miss). GLNG is benefiting from an improved shipping performance. The shipping unit has been performing well so far, aiding its top line.
Driven by the upsides, the stock has soared 98.1% in the past year. GLNG currently flaunts a Zacks Rank of 1.
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