The freight and logistics market is set for a rebound propelled by the expanding commercial activities globally. Also, easy access and convenience through digital technologies are fueling worldwide consumption and demand.
Considering the industry’s bright outlook, it could be wise to watch fundamentally sound trucking freight stocks Old Dominion Freight Line, Inc. (ODFL), C.H. Robinson Worldwide, Inc. (CHRW), and ArcBest Corporation (ARCB) with strengthening global trade trends.
After a slump in 2023 owing to high inflation and rising interest rates, global trade is experiencing an uptrend in 2024. During the first quarter, the value of trade in goods increased by around 1% quarter-over-quarter, and services grew by 1.5%. The growth was accelerated by positive trade dynamics for the United States and some developing countries.
Also, in a recent update of Global Trade Outlook and Statistics, WTO economists noted global merchandise trade growth of 2.3% year-on-year in the first half of 2024 and expect moderate expansion ahead in the year and in 2025.
Despite lingering geopolitical tensions and increased economic policy uncertainty, the global goods trade is expected to grow 2.7% in 2024, up from the prior estimate of 2.6%. Also, the volume of world merchandise trade is likely to exhibit a 3.0% increase in 2025.
Amid this, the United States freight and logistics market is expected to value $1.33 trillion in 2024. It is expected to grow to $1.67 trillion by 2030, exhibiting a 3.90% CAGR, driven by the rising e-commerce trade, technological advancement, rising consumption across the globe, and steady infrastructure investments.
Also, the global road freight transport market is projected to see strong growth and reach around $136.38 billion in 2028, growing at a CAGR of 6.5%. Trends like green initiatives and sustainability, digitalization, artificial intelligence, resilience, and supply chain visibility support the sector's expansion.
With these encouraging trends in mind, let’s delve into the fundamentals of the three top Trucking Freight stock picks, beginning with the third choice.
Stock #3: Old Dominion Freight Line, Inc. (ODFL)
ODFL operates as a less-than-truckload motor carrier. The company provides regional, inter-regional, and national less-than-truckload services, and expedited transportation. The company also offers various value-added services, including container drayage, truckload brokerage, and supply chain consulting.
On October 17, ODFL’s Board of Directors declared a quarterly cash dividend of $0.26 per share, payable on December 18, 2024, to shareholders of record at the close of business on December 4, 2024. The dividend payment represents a 30% increase from the quarterly cash dividend paid in December 2023.
ODFL’s annual dividend of $1.04 translates to a yield of 0.53% at the current share price. Its four-year average dividend yield is 0.35%. Also, the company’s dividend payouts have increased at a CAGR of 37.7% over the past three years. ODFL has raised its dividends for 6 consecutive years.
ODFL’s total revenue increased 6.1% year-over-year to $1.50 billion during the second quarter, which ended June 30, 2024. The company reported operating income of $421.69 million, up 7.7% from the prior-year period. Its net income and EPS came in at $322.04 million and $1.48, indicating growth of 10.2% and 11.3% year-over-year, respectively.
In addition, as of June 30, 2024, the company’s cash and cash equivalents stood at $74.30 million, compared to $433.80 million as of December 31, 2023.
Street expects ODFL’s revenue for the fiscal year (ending December 2025) to increase 6.1% year-over-year to $6.33 billion. The company’s EPS is expected to grow 12.4% year-over-year to $6.24 over the same year. Moreover, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of ODFL have surged 1.6% over the past month and 2.2% over the past year to close the last trading session at $198.05.
ODFL’s POWR Ratings reflect its robust outlook. The POWR Ratings are calculated by considering 118 different factors, with each factor weighted to an optimal degree.
ODFL has a B grade for Quality. It is ranked #10 out of 17 stocks in the Trucking Freight industry.
In addition to the POWR Ratings we’ve stated above, we also have ODFL’s ratings for Value, Growth, Momentum, Sentiment, and Stability. Get all ODFL ratings here.
Stock #2: C.H. Robinson Worldwide, Inc. (CHRW)
CHRW provides freight transportation services and related logistics and supply chain services internationally. It operates through two segments, North American Surface Transportation; and Global Forwarding. It provides transportation and logistics services, like truckload and less-than-truckload transportation brokerage services.
On August 8, CHRW’s Board of Directors declared an increase to its regular quarterly cash dividend to $0.62 per share from $0.61 per share, paid on October 1, 2024, to shareholders of record on September 6, 2024.
CHRW pays an annual dividend of $2.48, which translates to a yield of 2.28% at the current share price. Its four-year average dividend yield is 2.41%. Moreover, the company’s dividend payouts have increased at a CAGR of 6.3% over the past three years. CHRW has raised its dividends for 26 consecutive years.
On July 30, CHRW arrived at the strategic decision to sell its European Surface Transportation business to Sennder Technologies GmbH, the leading digital road freight forwarder in Europe. This was part of its enterprise strategy to get fit, fast, and focused.
The move will also drive focus on profitable growth in its four core modes – North American truckload, less-than-truckload, and global ocean and air – as the engines to create the most value for its stakeholders.
For the second quarter that ended June 30, 2024, CHRW’s total revenues increased 1.4% year-over-year to $4.48 billion, and its adjusted gross profit grew 3.3% from the year-ago value to $687.41 million. The company’s adjusted income from operations was $193.28 million for the quarter, up 31.7% year-over-year.
In addition, CHRW’s non-GAAP net income of $137.79 million or $1.15 per share reflects increases of 25.1% and 25% from the prior year’s quarter, respectively.
Analysts expect CHRW’s revenue and EPS for the third quarter (ended September 2024) to increase 4.5% and 36.7% year-over-year to $4.54 billion and $1.15, respectively. Furthermore, the company surpassed the consensus EPS estimates in three of the trailing four quarters.
Shares of CHRW have surged 53.9% over the past six months and 29.3% over the past year to close the last trading session at $108.88.
CHRW’s sound fundamentals are reflected in its POWR Ratings. The stock has a B grade for Growth. Within the same industry, CHRW is ranked #6 of 17 stocks.
Click here to access additional ratings of CHRW for Quality, Value, Momentum, Sentiment, and Stability.
Stock #1: ArcBest Corporation (ARCB)
ARCB engages in the provision of ground, air, and ocean transportation solutions. It operates in Asset-Based and Asset-Light segments. The company provides less-than-truckload (LTL) services that transport general commodities like food, textiles, apparel, and furniture.
On October 10, ARCB announced that its household goods moving service, U-Pack® partnered with Affirm to provide financing options for long-distance moves. Through the collaboration, customers who apply and are qualified can book a move now and pay on a payment plan later. The innovative payment plans will help customers manage their long-distance moving costs.
On August 6, ARCB joined TriumphPay as a full audit and payments network participant. This is a part of ARCB’s strategy to better serve carriers, improve operational efficiency, and enhance payment security.
In the second quarter that ended June 30, 2024, ARCB reported revenues of $1.08 billion. Its non-GAAP operating income grew 28.1% from the prior year’s quarter to $64.20 million. Its non-GAAP net income and EPS of $47.38 million and $1.98 indicate 24.8% and 28.6% growth from the year-ago value, respectively.
Furthermore, the company’s consolidated adjusted EBITDA from continuing operations rose 24.3% from the prior year’s quarter to $94.86 million.
Street expects ARCB’s revenue and EPS for the first quarter (ending March 2025) to increase 3.5% and 20.3% year-over-year to $1.07 billion and $1.61, respectively. The company has topped the consensus revenue estimates in all four trailing quarters.
Over the past year, ARCB’s stock has surged 8.2% to close the last trading session at $101.86.
ARCB’s POWR Ratings reflect its bright prospects. The stock has a B grade for Value and Growth. ARCB has topped among the 17 stocks in the Trucking Freight industry.
Click here to access additional ratings of ARCB for Momentum, Sentiment, Quality, and Stability.
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ODFL shares were unchanged in after-hours trading Tuesday. Year-to-date, ODFL has declined -1.20%, versus a 23.88% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
3 Freight and Logistics Stocks to Watch as Global Trade Rebounds StockNews.com
