2 Railroad Stocks To Watch For Your October 2022 Watchlist

The railway industry is currently in a period of change and transition. In recent years, railway companies have been investing heavily in new technology and infrastructure improvements. This has led to more efficient operations and better safety records. However, these investments have also made the industry more vulnerable to economic downturns. As a result, rail companies face pressure to cut costs and improve their bottom line.

In response, many rail companies implemented layoffs and other cost-cutting measures. This has led to increased tension between workers and management, as well as between the different railway companies. Despite these challenges, the rail industry remains an important part of the US economy. With that said, rail stock they have been a popular investment among stock market investors for many years and offer a number of advantages.

First, railway companies tend to be very stable and make consistent profits. This makes them an ideal investment for investors looking for long-term growth. Additionally, rail stocks tend to pay high dividends, which can provide investors with a valuable source of income. However, it is important to note that rail stocks are not without risk. With all of this in mind, here are two top rail stocks to check out on the stock Exchange now.

Railroad Stocks to Buy [Or Avoid] Right now

1. Union Pacific Corporation (UNP shares)

For the first time, Pacific Union Corporation (UNP) is one of the largest rail operators in the United States. The company’s Union Pacific Railroad subsidiary operates 32,000 miles of track in 23 states, linking major West Coast and Gulf Coast ports with eastern gateways.

Recent news on UNP actions

In September, Union Pacific Corporation announced that it will release its financial results for the third quarter of 2022. In detail, the company said that it will report its results for the third quarter of 2022 on Thursday, October 20, 2022, before the market opens. While we wait for that, let’s take a look at how UNP fared in the second quarter of 2022.

In July, Union Pacific Corporation reported an improvement in its second-quarter 2022 earnings results. Dipping, the company posted second-quarter 2022 earnings of $2.93 per share on revenue of $6.3 billion. Meanwhile, UNP reported revenue growth of 13.9% over the same period in 2021. Additionally, the company reported that it repurchased approximately $722 million in share buybacks in the second quarter of 2022.

Furthermore, Lance Fritz, President of Union Pacific and CEO of UNP had this to say in his letter to shareholders: “We also experienced record fuel prices and rising inflation, which added pressure to our total costs. Offsetting cost pressures were higher fuel surcharge revenues, strong base pricing, a positive mix and continued train sizing initiatives. The result was growth in operating income and revenue. Our network fluidity improved during the quarter and we are positioned to increase volumes in the second half of 2022 as we continue to improve our service product.

UNG Stock Chart

By mid-morning Tuesday, UNP shares were up 1.35% at $203.00 a share. With Union Pacific preparing to announce third quarter 2022 earnings results, might now be a good time to add UNP stock to your watch list?

Source: TD Ameritrade TOS

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2. Trinity Industries Inc. (TRN Share)

Below Trinity Industries Inc. (TRN) is an American provider of rail transportation products and services. In short, the company sells and leases rail products and railcar maintenance services throughout North America. As is, the company currently offers its shareholders an annual dividend yield of 3.90%.

Recent TRN Stock News

Last month, TRN announced that its Board of Directors declared a quarterly dividend of $0.23 per share of common stock. Additionally, this dividend payment represents the company’s 234th consecutive dividend payment to its shareholders.

Apart from that, on Monday the company announced that it has signed a new long-term railcar supply agreement with GATX Corporation. Digging deeper, details of the deal include that TRN will deliver a combination of 15,000 new-build freight cars and tanks over a six-year period. In addition, Trinity will deliver 6,000 tank cars at a rate of 1,200 cars per year from 2024 through 2028. Additionally, the remaining 9,000 cars will be ordered at a rate of 1,500 cars per year from 2023 through 2028. The deal is valued at $1.8 billion for Trinity Industries. .

Jean Savage, President and CEO of Trinity, commented: “This multi-year railcar order with GATX represents the extension of a strong partnership. We are proud of the relationship we have built with GATX and pleased that they have once again selected TrinityRail as North America’s leading rail car manufacturer.

TRN Stock Chart

Following this announcement by the company, the shares rose during trading on Monday by more than 6%. Meanwhile, during the mid-morning trading session on Tuesday, shares of TRN were up another 1.66% on the day at $23.22 per share. Given this announcement, do you think now is the time to invest in TRN shares?

TRN Stock Chart
Source: TD Ameritrade TOS

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