Investors seeking opportunities in the transportation industry may find these stocks particularly compelling. They are well-poised to capitalize on current economic trends and future developments.
What’s great about these strong buy transportation stocks is that many pay healthy dividends. This is on top of their expected capital appreciation, which makes them valuable additions to investors’ portfolios. Regular dividend contributions can help smooth out market downturns.
That said, in this article, we delve into these top-rated transportation stocks, exploring the key factors behind their strong buy ratings and what makes them attractive investments for June 2024.
So here are three transportation stocks with strong buy ratings for this month.
CSX (CSX)
CSX (NASDAQ:CSX) plays a crucial role in the transportation industry, connecting major metropolitan areas in the eastern United States with over 240 short-line railroads and more than 70 ocean, river and lake ports.
Its vast rail network spans approximately 20,000 route miles. This network is integral to transporting goods across the eastern United States, where nearly two-thirds of the nation’s population resides.
In 2024, CSX reported revenue of $3.68 billion, a 1% decline year-over-year due to lower fuel surcharges, a decline in other revenue, weaker trucking revenue and reduced export coal prices. However, gains in merchandise pricing and higher intermodal and coal volumes partially offset these declines.
The company aims to build on its momentum throughout the rest of the year by capitalizing on favorable market trends across its served markets. This then makes it one of those strong buy transportation stocks to consider.
Delta Air Lines (DAL)
Delta Air Lines (NYSE:DAL) is one of the largest airlines in the world. It provides passenger and cargo air transportation services across a vast network of domestic and international destinations.
The airline operates one of the most extensive and modern fleets, offering services to over 300 destinations in more than 50 countries. In Q1 2024, the airline took delivery of seven new aircraft, including the A321neo and A220-300, which are over 25% more fuel-efficient than the aircraft they are replacing €‹.
Delta expects continued strong momentum in 2024. It projects record revenue, a mid-teens operating margin, and earnings of $2.20 to $2.50 per share for the June quarter. The airline anticipates earnings of $6 to $7 per share for the full year and free cash flow of $3 to $4 billion.
DAL also has a strong buy analyst rating, and substantial EPS and revenue increases are forecasted over the next five years or so.
Alaska Air Group (ALK)
Alaska Air Group (NYSE:ALK) is the parent company of Alaska Airlines and Horizon Air, offering passenger and cargo air transportation services across the United States and to various international destinations.
Its significant role in transportation provides reliable and efficient air travel options. The company’s extensive network covers key markets on the West Coast, Alaska, Hawaii and various international destinations.
Last quarter, ALK took delivery of two E175 aircraft, expanding Horizon Air’s fleet to 43. The company also announced new routes, including daily nonstop flights between Santa Rosa and Las Vegas, and plans to increase capacity out of Portland by 25% €‹.
Alaska Air Group repurchased 561,086 shares of common stock for approximately $21 million, demonstrating a commitment to returning value to shareholders. Alaska Air Group remains optimistic about its performance in 2024, focusing on strategic growth, cost control and network optimization.
On the date of publication, Matthew Farley did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Matthew started writing coverage of the financial markets during the crypto boom of 2017 and was also a team member of several fintech startups. He then started writing about Australian and U.S. equities for various publications. His work has appeared in MarketBeat, FXStreet, Cryptoslate, Seeking Alpha, and the New Scientist magazine, among others.