C.H. Robinson Worldwide CHRW benefits from its efforts to reduce costs in the face of the current freight downturn. Increased efficiency is aiding the transportation heavyweight’s bottom line. Efforts to reward its shareholders also bode well.
Let us explore the factors that make this Zacks Rank #2 (Buy) stock a strong investment pick at the moment.
CHRW’s Growth Projections & Surprise History: The Zacks Consensus Estimate for the current and the next-year earnings has been revised upward 5.8% and 4.7% in the past 60 days, respectively. Such favorable estimate revisions indicates brokers’ confidence in the stock.
Given the wealth of information brokers have at their disposal, investors should be guided by their expert advice and the direction of their estimate revisions. This is because it serves as a key indicator in determining the price of a stock.
The Zacks Consensus Estimate for the current and the next-year earnings has been revised upward 2.5% and 2.7%, respectively. CHRW’s long-term earnings (three to five years) growth rate is 25.1%, way ahead of its industry’s 12%. The company has surpassed the Zacks Consensus Estimate for earnings in three of the past four quarters (missing the mark in the other one). The average beat is 10.3%.
CHRW’s Robust Price Performance: The company’s price trend reveals that its shares have gained 24.8% over the past year, surpassing the industry’s 4.4% decline.
One-Year Price Comparison
Image Source: Zacks Investment Research
Tailwinds for CHRW: CHRW has been making uninterrupted dividend payments for more than 25 years. During 2023, CHRW paid $291.56 million in cash dividends. In August, C.H. Robinson’s board of directors approved a dividend hike of 1.6%, thereby raising its quarterly cash dividend to 62 cents per share ($2.48 annualized) from 61 cents ($2.44 annualized).
Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks, like CHRW, are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario. The effectiveness of the company's pricing strategies and cost-saving measures are serving this freight broker well, as reflected by its impressive earnings history.
Bullish Industry Rank: The industry to which CHRW belongs currently has a Zacks Industry Rank of 82 (out of 249). Such a favorable rank places it in the top 33% of Zacks Industries. Studies show that 50% of a stock price movement is directly related to the performance of the industry group it belongs to.
A mediocre stock within a strong group is likely to outclass a robust stock in a weak industry. Reckoning the industry’s performance becomes imperative.
Other Stocks to Consider
Investors interested in the Zacks Transportation sector may also consider Westinghouse Air Brake Technologies WAB and SkyWest SKYW.
Westinghouse Air Brake Technologies currently carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for 2025 earnings is expected to grow at 12.7% from 2024 estimates for WAB. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 9.5%. Shares of WAB have risen 73.6% in the past year.
SkyWest presently sports a Zacks Rank #1. The Zacks Consensus Estimate for 2025 earnings is expected to grow at 16.6% from 2024 estimates for SKYW.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 79.1%. Shares of SKYW have climbed 97.4% in a year.
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Be First to New Top 10 Stocks >>C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
SkyWest, Inc. (SKYW) : Free Stock Analysis Report
Westinghouse Air Brake Technologies Corporation (WAB) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
