It’s true what they say: Everything is now a “tech company.” Advances in technology have changed and disrupted many sectors and stocks, including some of the oldest stocks around. We’re talking about the railroads. This is true for our Best Dividend Stocks List pick in the sector.
Featuring an irreplaceable moat of one of the largest logistics networks of rail lines and terminals in the entire nation, our pick has been using technology to transform its business. Thanks to the latest in scheduling, software and even a dose of artificial intelligence, our pick transformed its logistics network to improve costs, reduce shipping times and, overall, boost its bottom line.
Streamlining the operations of such a large logistics network has become particularly important in the current economic environment.
While the economy isn’t currently crashing, freight volumes and manufacturing activity have begun to slip. However, our pick hasn’t felt a scratch from these effects. Thanks to its tech improvements, profits have never been higher. In fact, our pick managed to realize its all-time best quarterly operating ratio and see a strong 3% boost to profits despite slowing economic growth, which underscores just how important these tech innovations have been to its bottom line.
The best part is that our pick continues to adopt new ways of doing things, and it has added improved tech upgrades to its legacy rail lines. This will only help the company going forward and make it a winner in any constrained economic environment. Meanwhile, investors continue to feast on its steady dividend increases and hefty buyback program.
All in all, our transportation pick continues to chug along perfectly and makes for an ideal selection for your portfolio.
To summarize, here are five reasons why you should own this stock:
1. Operates a logistics monopoly of irreplaceable assets throughout the entire country.
2. Paid dividends for 120 consecutive years and grown its payout five times in the last 10 quarters!
3. Thanks to improvements to its operating model and new tech upgrades, the company’s EPS continues to rise during the constrained manufacturing environment.
4. Big winner from the Trump administration’s trade deals with Mexico & Canada.
5. Healthy payout ratio of 45% and growing yield of 2.18%.
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