Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Norfolk Southern Corp. (NSC), CSX Corporation (CSX), United Parcel Service, Inc. (UPS): These Stocks Can Transport Your Portfolio

Page 1 of 2

Exchange-traded funds offer a convenient way to invest in sectors or niches that interest you. If you’d like to add some transportation stocks to your portfolio, the iShares Dow Jones Transportation Average ETF could save you a lot of trouble. Instead of trying to figure out which companies will perform best, you can use this ETF to invest in lots of them simultaneously.

The basics
ETFs often sport lower expense ratios than their mutual fund cousins. The iShares ETF’s expense ratio — its annual fee — is a relatively low 0.47%.

This ETF has performed well, beating the world market over the past three and five years. As with most investments, of course, we can’t expect outstanding performances in every quarter or year. Investors with conviction need to wait for their holdings to deliver.

Why transportation?
Transportation is something of a staple, as we’ll always need to move ourselves and other things here and there. Better still, our global economies are starting to pick up, which means that companies will be shipping more products, boosting the industry.

Norfolk Southern Corp.

More than a handful of transportation companies had strong performances over the past year. Norfolk Southern Corp. (NYSE:NSC) surged 20%, recently hitting a 52-week high. It yields 2.6%, and has hiked its payout by an annual average of more than 11% over the past five years. Like other railroads, it’s been hit by lower coal volumes, as low natural gas prices have led to shrinking coal demand. It’s positioning itself for the future, though, investing heavily in capital projects.

CSX Corporation (NYSE:CSX), another railroad company, rolled ahead 17%. It, too, has been whacked by weakness in coal, but coal is likely to remain in demand internationally, and coal exports have been increasing. CSX Corporation (NYSE:CSX) is geographically well positioned to benefit from such exports, with its access to Eastern and Gulf Coast ports. The stock recently yielded 2.3%, and it has been aggressively upping its payout.

United Parcel Service, Inc. (NYSE:UPS) delivered a 9% gain and yields 2.9%. The delivery giant has seen its performance falter, in part due to massive pension-related write-offs. It also recently agreed to fork over a $40 million settlement in relation to an investigation into packages it delivered for illegal online pharmacies. (The packages it delivers for legitimate online businesses, such as Amazon.com, Inc. (NASDAQ:AMZN) and eBay Inc (NASDAQ:EBAY), though, have contributed significantly to its growth.) Meanwhile, the company has committed to hiring 25,000 veterans, and it stands to benefit if Congress continues hobbling the Post Office.

Page 1 of 2
Loading Comments...