Schneider (SNDR) gains 6.9% in one year: even more upside down? – February 23, 2022
Shares of Schneider National (NRDS – Free Report) trended bullishly on the stock market, gaining 6.9% year-on-year against its industry’s 9.9% decline.
Image source: Zacks Investment Research
Let’s take a look at the reasons for this impressive price gain and see if there’s more room to rally.
Strong performance in the Intermodal and Logistics segments are driving Schneider’s revenue, which grew 23.2% year-on-year in 2021. The Intermodal segment (revenue grew 17.3% in 2021) benefited from yield management, revenue per order and increased volumes, mainly in the Eastern rail network, while the Logistics unit (revenue up 60.2% from year-over-year) is thriving on favorable constructive market conditions, an increased spot mix and other factors.
SNDR has a strong liquidity position. Its cash and cash equivalents at the end of the fourth quarter of 2020 totaled $244.8 million, which is above current debt and finance lease obligations maturities of $61.4 million. This indicates that Schneider has enough cash to pay off its short-term debt.
We are impressed with Schneider’s efforts to reward its shareholders even in these uncertain times. To that end, SNDR’s Board of Directors approved a 14.3% increase in its quarterly cash dividend, bringing the total to 8 cents per share on its Class A and Class B common stock. The increased dividend is payable on April 8, 2022 to its shareholders of record as of March 11, 2022.
The Intermodal and Logistics units should continue to perform well over the coming quarters. This is likely to help SNDR’s performance, which should boost the performance of the stock, which currently has a Zacks rank of #1 (Strong Buy). You can see the full list of today’s Zacks #1 Rank stocks here.
With the resumption of economic activities and likely to accelerate in the coming days, freight demand is expected to maintain its northward movement. This should support Schneider’s growth. Management anticipates an excess demand condition with a gradual improvement in the supply chain. Schneider expects adjusted earnings per share for 2022 to be between $2.35 and $2.55. The midpoint of this guided range is above the $2.29 per share reached in 2021.
That the future is bright for the stock is supported by the Zacks consensus estimate for 2022 earnings revised 24 cents higher to $2.50 over the past 60 days.
Other actions to consider
Investors interested in the Zacks Transportation business may also consider Washington International Shippers (EXPD – free report) and ArcBest Corporation (ARCB – free report).
Expeditors currently wears a Zacks Rank #2 (Buy). Positive airfreight revenue supports EXPD. Further growth in air cargo tonnage volumes contributed to results in each of the four quarters of 2021.
Shares of Expeditors have gained 12.7% in one year. In May 2021, Expeditors announced an 11.5% increase in its semi-annual cash dividend, bringing the total to 58 cents per share. EXPD has an impressive track record when it comes to the use of its shareholders’ money. The optimism surrounding the stock is evident from the 3.1% northward revision to the Zacks consensus estimate for 2022 earnings over the past 60 days.
ArcBest currently sports a Zacks rank of 1. ARCB has a stellar surprise history. Its earnings have exceeded Zacks’ consensus estimate in each of the previous four quarters, averaging 31.4%.
ArcBest shares jumped 46.4% in one year. Iimproving freight conditions in the United States bodes well for the ARCB. Strong customer demand and rising market rates are supporting ARCB’s growth.