Friday, July 5, 2013

Best Railroad Companies To Watch For 2014

When looking for promising candidates for your stock portfolio, it's easy to just think about the prominent names of the day, such as Facebook, Ford, or Bank of America. But there are plenty of other possibilities, many of which have been under our nose for quite some time.

Permit me to introduce you to Union Pacific (NYSE: UNP  ) , for example. Here are a bunch of interesting things about the company and its stock.

The basics: The company traces its roots�back well before the Civil War, to 1848 and the completion of the first 10 miles of the Galena and Chicago Union Railroad. In 1862, President Lincoln signed the Pacific Railroad Act, authorizing the Union Pacific and Central Pacific railroad companies to build a transcontinental railroad. Union Pacific's first rail was laid in Omaha in 1865.
� Today, Union Pacific is one of America's top railroad companies, with roughly 32,000 miles covering 23 states in the Western two-thirds of the country. As of the end of 2012, it employed 45,700 workers and sported 8,400 locomotives.
� Like other railroad companies, Union Pacific has been challenged by weakness in the coal market, but less so than its Eastern rivals CSX (NYSE: CSX  ) and Norfolk Southern (NYSE: NSC  ) . Union Pacific has been performing well in part by raising prices and expanding other businesses, such as transporting oil.
� Union Pacific and holders of Union Pacific stock do face some risks, though, such as the fact that Berkshire Hathaway's Burlington Northern Santa Fe�Railway is looking into powering its trains with natural gas, which could help it compete better on price and put pressure on its competition.
� Union Pacific stock is up about 54% over the past year, and it has averaged annual gains of 20.5% over the past decade and 12.6% over the past 30 years. Clearly, Union Pacific stock has been good to its shareholders.
� Holders of Union Pacific stock enjoy a dividend yield recently around 1.7%, with the dividend having been raised 15% last year and averaging an annual gain of about 26% over the past five years. The payout ratio is low, too, with Union Pacific paying out only about a third of its earnings, leaving plenty of room for further growth.
� A peek at some of the characteristics of Union Pacific stock via the company's financial statements offers reasons to smile, with measures such as net profit margins and return on invested capital rising steadily in recent years and free cash flow more than doubling over the past five years to $2.3 billion.
� The valuation of Union Pacific stock looks un-bargain-like, with a recent P/E ratio near 19, but its forward P/E ratio is around 14.6.

Demand for railroad services isn't likely to flag anytime soon, especially as rail transport is far more cost-effective than trucking. (Trains can transport a ton of cargo more than 400 miles on a single gallon of fuel.) Union Pacific stock is worth considering if you're looking for a solid long-term performer as well as dividend income. You might want to buy some now -- or add it your watch list, and hope that the price drops some, offering an entry point with greater margin of safety.

Best Railroad Companies To Watch For 2014: Navistar International Corporation (NAV)

Navistar International Corporation, through its subsidiaries, manufactures and sells commercial and military trucks, buses, diesel engines, and recreational vehicles, as well as provides service parts for trucks and trailers worldwide. The company operates in four segments: Truck, Engine, Parts, and Financial Services. The Truck segment manufactures and distributes trucks and buses for the common carrier, private carrier, government, leasing, construction, energy/petroleum, military vehicles, and student and commercial transportation markets under the International and IC brands; assembles components; and produces sheet metal components, including truck cabs. This segment markets its products through its independent dealer network, and distribution and service network retail outlets comprising 784 in the United States and Canada, 86 in Mexico, and 292 internationally, as well as markets reconditioned used trucks to owner-operators and fleet buyers through its network of us ed truck centers. The Engine segment designs, manufactures, and sells diesel engines under the MaxxForce brand for use in the medium trucks, heavy trucks, and military vehicles, as well as for its IC branded school buses and other applications. The Parts segment provides customers with products required to support the company�s brands, as well as offers other truck, trailer, and engine service parts. The Financial Services segment provides and manages retail, wholesale, and lease financing services for products sold by the Truck and Parts segments and their dealers. It also operates as a private-label designer and manufacturer of diesel engines for the pickup truck, van, and sport utility vehicle markets. Navistar International Corporation was founded in 1902 and is headquartered in Lisle, Illinois.

Best Railroad Companies To Watch For 2014: Summer Infant Inc.(SUMR)

Summer Infant, Inc., through its subsidiaries, engages in the design, marketing, and distribution of branded juvenile health, safety, and wellness products primarily in North America and the United Kingdom. It offers products in various product categories, including nursery audio/video monitors, safety gates, durable bath products, bed rails, nursery products, booster and potty seats, bouncers, travel accessories, high chairs, swings, feeding products, car seats, and nursery furniture, as well as infant thermometers, related health and safety products, cribs, baby gear, swaddling blankets, and bottles. The company sells its products principally under the Summer Infant, Carter?s, and Disney brand names through mass merchant retailers and specialty retailers, as well as directly to consumers. Summer Infant, Inc. is headquartered in Woonsocket, Rhode Island.

Top 10 Penny Stocks To Buy Right Now: Socket Mobile Inc.(SCKT)

Socket Mobile, Inc. produces and sells mobile handheld computers and data collection products for the business mobility market. The company offers products to run mobile applications that enable the accessing, collection, and processing of data by using Bluetooth and wireless local area network (LAN) connection technologies. Its product line includes a family of handheld computer products for business enterprise uses; wearable cordless ring scanners for industrial applications; and a range of data collection products, including two dimensional (2D) and linear (1D) bar code scanners, plug-in radio frequency identification reader/writer products, and plug-in magnetic stripe readers that work with the company?s handheld computers, as well as 2D and 1D cordless hand scanners, which work with third-party mobile handheld devices, such as Smartphones, tablet computers, ultra-mobile personal computers, notebooks, and desktop systems. The company also offers original equipment man ufacturer (OEM) embedded products consisting of Bluetooth and wireless LAN plug-in cards that are used primarily by OEMs of electronic products to build wireless connection functions into their products using the Bluetooth and wireless LAN standards for wireless connectivity; and provides extended warranty and accidental breakage coverage services for products, including handheld computers, and ring and cordless hand scanners. It markets its products through a network of distributors and resellers, as well as through OEMs and value added resellers in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. The company was formerly known as Socket Communications, Inc. and changed its name to Socket Mobile, Inc. in April 2008. Socket Mobile, Inc. was founded in 1992 and is headquartered in Newark, California.

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