Shares of Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB), scaled a 52-week high of $184.11 in the trading session on Sept. 26, 2024, before closing a tad lower at $182.27.
Let’s delve deeper to find out the factors working in favor of Wabtec stock.
Why the Uptick in the WAB Stock?
Wabtec’s top line has been benefiting from higher sales across its Freight and Transit segments. While the Freight segment benefits from growth in services and components, the transit segment gains from strong aftermarket and original equipment manufacturing sales. WAB is expected to continue its strong performance due to strong underlying demand and a robust backlog.The ongoing summer season is expected to provide a further boost to revenues.
Driven by this encouraging backdrop, management raised its current-year earnings per share (EPS) guidance. Wabtec raised 2024 EPS guidance to the range of $7.20-$7.50 from $7.00-$7.40 guided previously. The Zacks Consensus Estimate of $7.46 lies within the updated guided range.
Wabtec’s full-year revenue guidance remains unchanged in the $10.25 billion-$10.55 billion band. The Zacks Consensus Estimate of $10.39 billion lies within the guided range.
Highlighting its pro-investor stance, Wabtec (on Feb. 14, 2024) announced a 17.6% dividend increase, thereby raising its quarterly cash dividend from 17 cents per share to 20 cents. This quarterly dividend of 20 cents (80 cents annualized) per share gives Wabtec a 0.47% yield at the current stock price. This company’s payout ratio is 11%, with a five-year dividend growth rate of 12.34%.
Westinghouse Air Brake Technologies Corporation Dividend Yield (TTM)
Westinghouse Air Brake Technologies Corporation dividend-yield-ttm | Westinghouse Air Brake Technologies Corporation Quote
Wabtec’s bottom line has been benefiting from its consistent efforts to reward its shareholders through dividends and share buybacks. In 2022, WAB paid dividends of $111 million and repurchased shares worth $473 million. In 2023, WAB paid dividends of $123 million and repurchased shares worth $409 million. During the first six months of 2024, WAB paid dividends of $71 million and repurchased shares worth $375 million. Such shareholder-friendly moves instill investors’ confidence and positively impact the company’s bottom line.
Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks, like WAB, are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario.
Wabtec has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 11.83%. Driven by this upbeat earnings performance and the positives mentioned above, WAB shares have gained 43.6% so far this year, outperforming its industry as well as the S&P 500, of which the company is a key member.
YTD Price Performance
Image Source: Zacks Investment Research
The positive sentiment surrounding WAB stock is evident from the fact that the Zacks Consensus Estimate for the third quarter, as well as full-year 2024 earnings, has been revised upward in the past 60 days. The Zacks Consensus Estimate for third-quarter and full-year 2024 EPS indicates growth of 9.4% and 26% from the respective 2023 figures.
Image Source: Zacks Investment Research
WAB’s Zacks Rank and Other Stocks to Consider
Wabtec currently carries a Zacks Rank #2 (Buy).
Some other top-ranked stocks from the Zacks Transportation sector are C.H. Robinson Worldwide, Inc. (CHRW) and Alaska Air Group, Inc. ALK. Each stock presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
CHRW has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 7.33%.
CHRW has an expected earnings growth rate of 22.42% for 2024. The Zacks Consensus Estimate for CHRW 2024 earnings has been revised 11.3% upward over the past 90 days. Shares of CHRW have gained 24.5% so far this year.
ALK has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters (missed the mark in the remaining quarter), delivering an average surprise of 21.92%.
ALK has an expected earnings growth rate of 3.72% for 2024. The Zacks Consensus Estimate for ALK 2024 earnings has been revised 13.8% upward over the past 60 days. Shares of ALK have gained 8.7% so far this year.
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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.
