In this article, we discuss 5 best railroad stocks that pay dividends. If you want to read our detailed analysis of railroad dividend stocks, go directly to read 10 Best Railroad Stocks that Pay Dividends.
5. GATX Corporation (NYSE:GATX)
Dividend Yield as of August 18: 2.02%
GATX Corporation (NYSE:GATX) is a global leader in railcar leasing that owns fleets in North America, Europe, and Asia. The company also owns one of the largest aircraft spare engine lease portfolios. In Q2 2022, the company reported an investment volume of over $314.1 million and its net income came in at over $2.6 million. Its revenue for the quarter stood at over $312.7 million.
GATX Corporation (NYSE:GATX) has been making uninterrupted dividend payments since 1919. In the past decade, the company remained committed to shareholder returns, paying over $1.5 billion through dividends and share repurchases. It offers a quarterly dividend of $0.52 per share, with a dividend yield of 2.02%, as of August 18.
Highlighting the company’s pricing power, Susquehanna maintained its Positive rating on GATX Corporation (NYSE:GATX) in August.
At the end of Q2 2022, 17 hedge funds tracked by Insider Monkey owned stakes in GATX Corporation (NYSE:GATX), up from 14 in the previous quarter. These stakes hold a collective value of over $193.3 million. With 1.6 million shares, GAMCO Investors was the company’s leading stakeholder in Q2.
4. Union Pacific Corporation (NYSE:UNP)
Dividend Yield as of August 18: 2.15%
Union Pacific Corporation (NYSE:UNP) is a Nebraska-based railroad company that covers 23 states in the US. In July, Credit Suisse initiated its coverage of the stock with an Outperform rating and a $255 price target, appreciating its structural advantages and business fundamentals.
In Q2 2022, Union Pacific Corporation (NYSE:UNP) reported operating revenue of $6.3 billion, up 14% from the same period last year. This growth was driven by higher fuel surcharge revenue, core pricing gains, and a positive business mix. The company’s operating income stood at $2.5 billion, growing 1% from the prior-year period.
Union Pacific Corporation (NYSE:UNP) has paid dividends on its common stock for 123 consecutive years. Its quarterly payout stands at $1.30 per share, with a dividend yield of 2.15%, as of August 18. For FY22, the company targets a long-term dividend payout ratio of 45%.
As per Insider Monkey’s database, 65 hedge funds owned stakes in Union Pacific Corporation (NYSE:UNP), worth over $6.3 billion. Fisher Asset Management was the company’s leading stakeholder with stakes worth over $1.1 billion.
Carillon Tower Advisers mentioned Union Pacific Corporation (NYSE:UNP) in its Q1 2022 investor letter. Here is what the firm has to say:
“Union Pacific (NYSE:UNP) benefited from rising oil prices, which typically bring more demand for rail shipping as opposed to moving freight by truck. Rail transportation can be much more fuel-efficient than over-the-road trucking.”
3. The Greenbrier Companies, Inc. (NYSE:GBX)
Dividend Yield as of August 18: 3.34%
The Greenbrier Companies, Inc. (NYSE:GBX) is an American rail transport company that mainly specializes in transportation services. 11 hedge funds in Insider Monkey’s database owned stakes in the company in Q2 2022, down from 16 in the previous quarter. These stakes have a total value of nearly $30 million.
In fiscal Q3 2022, The Greenbrier Companies, Inc. (NYSE:GBX)’s revenue showed a 76.3% year-over-year growth at $793.5 million. Its new railcar backlog reached its highest value in six years at $3.6 billion and recorded a lease fleet utilization of 98%. The company ended the quarter with $450 million in cash and cash equivalents.
On July 11, The Greenbrier Companies, Inc. (NYSE:GBX) declared a 33rd consecutive quarterly dividend of $0.27 per share. As of August 18, the stock’s dividend yield came in at 3.34%.
2. Trinity Industries, Inc. (NYSE:TRN)
Dividend Yield as of August 18: 3.36%
Trinity Industries, Inc. (NYSE:TRN) is a market-leading company that provides railcar products and services in North America. As the company improved its inventories to speed up its production in the second half of the year, Wells Faro reiterated its Overweight rating on the stock in July.
In Q2 2022, Trinity Industries, Inc. (NYSE:TRN) reported revenue of $417 million, showing a 12.2% year-over-year growth. Its backlog was recorded at $2.2 billion at the end of the quarter, and lease fleet utilization stood at 97.2%. Year-to-date, the company returned $90 million of capital to shareholders. Moreover, its strong free cash flow after investments and dividends stood at $43 million.
Trinity Industries, Inc. (NYSE:TRN) has raised its dividends for 11 years in a row. The company pays a quarterly dividend of $0.23 per share with a dividend yield of 3.36%, as of August 18.
As of the close of Q2 2022, 18 hedge funds in Insider Monkey’s database owned investments worth $80.4 million in Trinity Industries, Inc. (NYSE:TRN). Chuck Royce and Jim Simons were two of the company’s most prominent stakeholders in Q2.
1. USD Partners LP (NYSE:USDP)
Dividend Yield as of August 18: 9.65%
USD Partners LP (NYSE:USDP) develops and operates energy-related rail terminals and other midstream infrastructure assets. On August 1, the company declared a quarterly dividend of $0.1235 per share, with a dividend yield of 9.65%.
In Q2 2022, USD Partners LP (NYSE:USDP) reported a net income of $3.8 million, and its revenue for the quarter came in at $33.7 million. The company’s net cash provided by operating activities stood at $6.2 million, with a distributable cash flow of $10.2 million. Its cash position also remained stable, with $4.3 available in cash and cash equivalents at the end of the quarter.
At the end of Q2 2022, EJF Capital was the company’s only stakeholder, with stakes worth $130 million.
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