Dividend.com: FreightCar Off Track

FreightCar America Misses Its Train

FreightCar America(RAIL Quote) is getting clobbered today after missing Wall Street earnings expectations. Sales fell more than 27 percent in the quarter to $141.3 million. The railcar company is getting squeezed on sharp material-cost increases on some of its fixed price contracts.

The big negative for the company is a reduction in orders for new railcars, which totaled 1,436 units in the last quarter. Previously, the company had received orders of 2,396 units in the first quarter of 2008, and 2,262 units in the second quarter of 2007.

Until FreightCar America can better execute its business model, we would urge investors to avoid these shares. The company has a small dividend yield of 0.66% (based on Friday's closing stock price of $36.13). Take a look at other names in the railroad sector for better returns.

MDU Resources Has Positive Quarter, Raises Guidance

MDU Resources(MDU Quote) just reported a solid quarter in which profits were up 29% on strong natural gas and oil production. The company believes the rest of the year will continue to be strong, as energy prices continue to fetch historically high prices.

Management is increasing guidance to a range of $2.10 to $2.35 per share, above its previous estimates of $1.85 to $2.10 per share. MDU is a well-diversified company, conduction operations in five different areas: natural gas and oil production, natural gas pipelines and energy services, construction materials and contracting, construction services, and electric and natural gas utilities.

We find shares of MDU Resources attractive at present levels. The stock is up nearly 120% in the last five years, climbing slowly and steadily (which, as we all know, "wins the race"). Paying 15 times earnings for this company's revenue growth is also not expensive. The company has a 1.83% dividend yield, based on Friday's closing stock price of $31.65.