Best Trucking Stocks

Though it might seem risky for some investors to consider trucking stocks, the fact is that the underlying industry has been on the move since the COVID-19 bottom. According to data from the U.S. Bureau of Transportation Statistics, the Trucking Tonnage Index slipped to 106.4 points in April 2020, a low not seen since June 2017. But in April of this year, the index hit 113.8 points, a rise of 7%. Should this trend continue — and consumer behaviors suggest that it will — you should keep an eye on these trucking stocks.

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Contributor, Benzinga
April 20, 2024

JB Hunt Transport Servs (NASDAQ:JBHT)

As the coronavirus pandemic turned major metropolitan areas from Los Angeles to New York eerily quiet, it was only natural to fear the worst for companies like J.B. Hunt. However, the transport giant surprised onlookers with its strong comeback performance since hitting bottom in late March 2020. Much of the enthusiasm centers on the company’s financial performance, where it posted revenue of $9.64 billion in 2020, up slightly more than 5% from 2019’s tally of $9.17 billion.

$167.30
3.10[1.89%]
Last update: 4:00PM (Delayed 15-Minutes)
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Open166.330Close167.300
Vol / Avg.1.481M / 859.950KMkt Cap17.265B
Day Range165.635 - 170.07552 Wk Range160.070 - 219.505

Knight-Swift (NYSE:KNX)

In April 2017, the usually pedestrian trucking sector generated massive waves in the mainstream media with the merged entity that eventually became Knight-Swift Transportation. At the time, the brands represented two of the largest trucking companies. Today, Knight-Swift is the commercial transportation industry’s largest full truckload carrier. Unlike its rivals, Knight-Swift did see a revenue decline year-over-year of 3.5% to $4.67 billion. However, a first quarter of 2021 sales performance of $1.22 billion (up 9% from Q1 2020) suggests a normalization of its core business.

$48.14
0.26[0.54%]
Last update: 4:20PM (Delayed 15-Minutes)
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Open47.870Close48.140
Vol / Avg.2.447M / 2.155MMkt Cap7.751B
Day Range47.830 - 48.56052 Wk Range45.730 - 60.990

Landstar System (NASDAQ:LSTR)

From its website, Landstar System is an “asset-light provider of integrated transportation management solutions.” Primarily operating in the U.S., the company also transports goods between its home market and Canada, Mexico and other international locations. In 2020, Landstar System rang up top-line sales of $4.13 billion, up a little over 1% from 2019’s sales total of $4.09 billion. Better yet, it posted revenue of almost $1.3 billion in Q1 2021, up 39% year-over-year.

$170.81
3.71[2.22%]
Last update: 4:00PM (Delayed 15-Minutes)
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Open166.920Close170.810
Vol / Avg.266.174K / 266.431KMkt Cap6.109B
Day Range166.920 - 171.08052 Wk Range161.130 - 208.620

ZTO Express (Cayman) (NYSE:ZTO)

One of the major transportation companies with a lower equity unit price, ZTO Express was once one of the best stocks under $20 in early 2019. Since then, ZTO never quite dipped that low again, even during the panic of the coronavirus. In fact, shares only experienced relatively short corrections in the first quarter of 2020. Based in China, decisive and sometimes draconian action by the government there may have contributed to its stability.

$19.94
-0.06[-0.30%]
Last update: 5:11PM (Delayed 15-Minutes)
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Open19.840Close19.940
Vol / Avg.3.437M / 4.438MMkt Cap16.046B
Day Range19.660 - 19.95052 Wk Range15.895 - 30.050

Old Dominion Freight Line (NASDAQ:ODFL)

Old Dominion Freight Line is the third-largest less-than-truckload carrier in the United States, with more than 240 service centers and 9,200-plus tractors. OD is by far one of the most disciplined and efficient providers in the trucking industry, and its profitability and capital returns stand head and shoulders above its peers. Strategic initiatives revolve around increasing network density through market share gains and maintaining industry-leading service via consistent infrastructure investment.

$211.82
4.00[1.92%]
Last update: 4:20PM (Delayed 15-Minutes)
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Open209.870Close211.820
Vol / Avg.1.540M / 1.359MMkt Cap46.092B
Day Range208.820 - 212.85552 Wk Range147.900 - 227.800

Though it might seem risky for some investors to consider trucking stocks, the fact is that the underlying industry has been on the move since the COVID-19 bottom. According to data from the U.S. Bureau of Transportation Statistics, the Trucking Tonnage Index slipped to 106.4 points in April 2020, a low not seen since June 2017. But in March of this year, the index hit 117.7 points, a rise of over 10%.

Should this trend continue — and consumer behaviors suggest that it will — you should keep an eye on these trucking stocks.

Quick Look at the Best Trucking Stocks:

With American consumers currently busy reclaiming their everyday lives that the COVID-19 pandemic rudely stole from them, this dynamic sharply contrasted with the national mood a little more than one year ago. Back then, the public health crisis quickly shuttered nonessential businesses, which in turn caused investors to flee from virtually all asset classes, including dependable ones like the best trucking stocks.

Consumers of all ages are beginning to feel comfortable venturing out. This has significant implications for the long-haul transportation industry, possibly providing an upside opportunity for adventurous investors.

Overview: Trucking Stocks

Since humankind invented the wheel and set the foundational cornerstone of the transportation industry, the concept of trucking stocks became a matter of inevitability. The only question was when. The answer became much clearer during the late 1800s when Karl Benz first put an internal combustion engine in a truck. From there, accretive improvements in technology sparked greater capacities, larger loads and longer distances. Decades later, the post-World War II era catalyzed an unprecedented boom in commerce, bolstering the trucking industry.

But many people who built long-term careers in the commercial transportation sector described the 1970s as the golden age of trucking. Demographically, this concept makes sense as the first of the baby boomer generation professionally came of age during this period. Better yet, business boomed for the trucking industry as historical population shifts, such as the Great Migration saw communities move throughout the continental U.S. In turn, this expanded the scope of consumer demand, which was net bullish for trucking stocks.

Nevertheless, the industry was not without struggles. In the years since the sector’s golden age, greater oversight and enforcement of driving practices made the underlying occupation more stressful. Moreover, trucking jobs are not the easiest on your body. With baby boomers nearing retirement age and with fewer young people interested in replacing them, the industry has a labor shortage, an issue that still imposes a dark cloud. Also, the disruption from the COVID-19 pandemic did no favors.

Looking forward, though, investors have the potential of profiting substantively from trucking stocks. First, pent-up demand from consumers who denied retail transactions last year should boost commercial activities. Second, federal stimulus checks have already spiked spending behaviors, which is another positive for transportation. Finally, the employment level nationwide is still conspicuously below pre-pandemic norms, possibly suggesting that more people will consider a well-compensated career in trucking.

Best Online Brokers for Trucking Stocks

If you’re looking for a market segment that provides a real-time indicator of consumer sentiment, you can’t go wrong with trucking stocks. After all, long-haul transportation is where the rubber meets the road — literally and figuratively.

And it’s not just about the movement of physical goods. For instance, millennials have been moving from high-priced cities in California and New York to states with lower costs of living. As population areas increase in size, they require various products and commodities, triggering downwind demand for the transportation industry.

Naturally, this dynamic means that any broker will allow you to buy shares of reputable trucking stocks. Thus, you can focus your search based on the criteria most important to you. Here is a list of the best brokers to get you started.

Features to Look for in Trucking Stocks

  1. Stable sales: Following the initial impact of the coronavirus pandemic, very few companies escaped unscathed from market volatility. The few that did, such as Teladoc Health (NYSE: TDOC), enjoyed direct relevance toward the so-called new normal. That said, the trucking industry became part of the broader frontline response because it was vital for maintaining national supply chains. Therefore, revenue in 2020 for the best trucking stocks will be relatively level compared to prior year sales, if not higher.
  2. Positive earnings: Unlike speculating on high-growth sectors like cloud computing or biotechnology, it’s all about value and predictability with the best trucking stocks. For one thing, the industry is a mature one, with viable organizations featuring long, storied track records. Second, long-haul transportation is a capital-intensive venture, which explains why so many smaller businesses struggle to gain traction. As such, look for companies with consistently positive earnings per share and free cash flow.
  3. Resilience: One of the advantages of putting your money to work with the best trucking stocks is dependable relevance. Until the day courier drones take over the world, the economics of the transportation sector keep it chugging along. However, the drawback is that this market segment is heavily dependent on consumer sentiment. Its large size also prevents it from being nimble. As a result, you should choose companies with high financial resilience, with the Altman Z-Score providing important clues regarding this attribute.

Keeping America Moving After all These Years

While technology is moving at a breakneck speed, certain fundamental components of the economy remain largely unchanged. For instance, while the specific products that you purchase in-store or online look radically different from their counterparts (if even one is available) a century ago, they had to get there somehow. Transportation services fill that gap, playing a crucial role in our global supply chain networks.

True, recent decades spelled both opportunities and challenging periods for trucking stocks. Yet consumer demand for physical goods have only increased, laying the foundation for many years of relevance ahead. In addition, the return to normalcy following the COVID-19 pandemic should bode well for commercial transportation.

Frequently Asked Questions

Q

Are Trucking stocks good investments?

A

Yes, trucking stocks have a high demand, although its important to consider their costs such as fuel and driver pay.

About Joshua Enomoto

His distinct writing style of distilling convoluted data into relatable and compelling narratives has earned him recognition among several investment-related publications.