Transportation and Automotive Sector Ideas

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>>> Old Dominion Freight Line -- Less-than-truckload (LTL) specialist Old Dominion Freight Line makes up for its small 0.3% yield with a blistering 35% annualized dividend growth rate over the last five years and a minuscule 12% payout ratio.


https://www.fool.com/investing/2023/09/07/4-top-dividend-payers-of-the-sp-500/?source=eptyholnk0000202&utm_source=yahoo-host&utm_medium=feed&utm_campaign=article


Despite being the second-largest LTL shipper in the U.S., it is the most efficient operator in its industry, with an ROIC of 34% and a net profit margin of 21%.

However, in its most recent quarter, revenue and EPS dropped a nerve-racking 15% and 20% amid softness in the U.S. trucking industry as it continued to rightsize from a pandemic-aided boom. Still, management believes it maintained its 12% market share in the quarter, highlighting that it is not a company-specific slowdown.

Furthermore, the third-largest LTL shipper, Yellow, recently filed for Chapter 11 bankruptcy protection, which could boost Old Dominion as it picks up incremental sales growth from its beleaguered peer. However, after posting total returns of over 1,400% over the last decade, the company trades at a lofty 38 times earnings -- making this another dividend-grower to consider dollar-cost averaging into over time.

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