6 Best Trucking Companies to Add to Your Portfolio

NEW YORK (TheStreet) -- The $700-billion trucking industry is an economic indicator that can pinpoint the health -- or sickness -- of the overall economy.

And right now, trucking is pointing downward. Still there are plenty of buy-worthy stocks in the trucking industry.

The stocks on this list are all rated "buy" with an A- or better rating. Check out which trucking industry stocks are good buys right now. And when you're done, be sure to read which retailer stocks are good buys.

TheStreet Ratings, TheStreet's proprietary ratings tool, projects a stock's total return potential over a 12-month period including both price appreciation and dividends. Based on 32 major data points, TheStreet Ratings uses a quantitative approach to rating over 4,300 stocks to predict return potential for the next year. The model is both objective, using elements such as volatility of past operating revenues, financial strength, and company cash flows, and subjective, including expected equities market returns, future interest rates, implied industry outlook and forecasted company earnings.

Buying an S&P 500 stock that TheStreet Ratings rated a "buy" yielded a 16.56% return in 2014 beating the S&P 500 Total Return Index by 304 basis points. Buying a Russell 2000 stock that TheStreet Ratings rated a "buy" yielded a 9.5% return in 2014, beating the Russell 2000 index, including dividends reinvested, by 460 basis points last year.

Note: Year-to-date returns are based on May 14, 2015 closing prices.

 

KNX Chart KNX data by YCharts

6. Knight Transportation Inc. (KNX)
Market Cap: $2.5 billion
Rating: Buy, A-
Year-to-date return: -11.2%

Knight Transportation, Inc., together with its subsidiaries, operates as a short-to-medium haul truckload carrier of general commodities primarily in the United States. It operates through two segments, Trucking and Logistics.

"We rate KNIGHT TRANSPORTATION INC (KNX) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 16.5%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • KNX's debt-to-equity ratio is very low at 0.11 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, KNX has a quick ratio of 1.67, which demonstrates the ability of the company to cover short-term liquidity needs.
  • KNIGHT TRANSPORTATION INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, KNIGHT TRANSPORTATION INC increased its bottom line by earning $1.25 versus $0.87 in the prior year. This year, the market expects an improvement in earnings ($1.50 versus $1.25).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 55.1% when compared to the same quarter one year prior, rising from $19.06 million to $29.56 million.
  • Powered by its strong earnings growth of 56.52% and other important driving factors, this stock has surged by 28.63% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.

 

 

 

 

ODFL Chart ODFL data by YCharts

5. Old Dominion Freight (ODFL)
Market Cap: $6.1 billion
Rating: Buy, A-
Year-to-date return: -8.7%

Old Dominion Freight Line, Inc. operates as a less-than-truckload (LTL) motor carrier in North America. It provides regional, inter-regional, and national LTL services, including ground and air expedited transportation, and consumer household pickup and delivery.

"We rate OLD DOMINION FREIGHT (ODFL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, impressive record of earnings per share growth, compelling growth in net income and notable return on equity. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth came in higher than the industry average of 1.8%. Since the same quarter one year prior, revenues rose by 12.2%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • ODFL's debt-to-equity ratio is very low at 0.10 and is currently below that of the industry average, implying that there has been very successful management of debt levels.
  • OLD DOMINION FREIGHT has improved earnings per share by 37.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, OLD DOMINION FREIGHT increased its bottom line by earning $3.10 versus $2.40 in the prior year. This year, the market expects an improvement in earnings ($3.65 versus $3.10).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 36.3% when compared to the same quarter one year prior, rising from $45.89 million to $62.52 million.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.

 

PTSI Chart PTSI data by YCharts

4. P.A.M. Transportation Services Inc. (PTSI)
Market Cap: $429 million
Rating: Buy, A-
Year-to-date return: 11.3%

P.A.M. Transportation Services, Inc., through its subsidiaries, operates as a truckload transportation and logistics company in the United States, Canada, and Mexico. The company is involved in the transportation of general commodities.

"We rate P.A.M. TRANSPORTATION SVCS (PTSI) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • P.A.M. TRANSPORTATION SVCS reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. During the past fiscal year, P.A.M. TRANSPORTATION SVCS increased its bottom line by earning $1.69 versus $0.69 in the prior year.
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 295.6% when compared to the same quarter one year prior, rising from $1.36 million to $5.37 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 1.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Powered by its strong earnings growth of 323.52% and other important driving factors, this stock has surged by 145.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. Looking ahead, the stock's sharp rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that other strengths this company displays justify these higher price levels.
  • The gross profit margin for P.A.M. TRANSPORTATION SVCS is rather low; currently it is at 15.62%. Regardless of PTSI's low profit margin, it has managed to increase from the same period last year. Despite the mixed results of the gross profit margin, PTSI's net profit margin of 5.39% is significantly lower than the industry average.

 

 

 

WERN Chart WERN data by YCharts

3. Werner Enterprises (WERN)
Market Cap: $2 billion
Rating: Buy, A-
Year-to-date return: -11.7%

Werner Enterprises, Inc., a transportation and logistics company, engages in transporting truckload shipments of general commodities in interstate and intrastate commerce. The company operates in two segments, Truckload Transportation Services and Value Added Services.

"We rate WERNER ENTERPRISES INC (WERN) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its impressive record of earnings per share growth, compelling growth in net income, revenue growth, largely solid financial position with reasonable debt levels by most measures and good cash flow from operations. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • WERNER ENTERPRISES INC reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, WERNER ENTERPRISES INC increased its bottom line by earning $1.36 versus $1.18 in the prior year. This year, the market expects an improvement in earnings ($1.61 versus $1.36).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 61.4% when compared to the same quarter one year prior, rising from $14.34 million to $23.14 million.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 0.7%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • WERN's debt-to-equity ratio is very low at 0.09 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, WERN has a quick ratio of 1.54, which demonstrates the ability of the company to cover short-term liquidity needs.
  • Net operating cash flow has significantly increased by 104.33% to $120.99 million when compared to the same quarter last year. In addition, WERNER ENTERPRISES INC has also vastly surpassed the industry average cash flow growth rate of 22.48%.

 

JBHT Chart JBHT data by YCharts

2. J.B. Hunt Transport Services Inc. (JBHT)
Market Cap: $10.2 billion
Rating: Buy, A
Year-to-date return: 4.2%

J.B. Hunt Transport Services, Inc., together with its subsidiaries, provides surface transportation and delivery services in the continental United States, Canada, and Mexico.

"We rate HUNT (JB) TRANSPRT SVCS INC (JBHT) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, impressive record of earnings per share growth, compelling growth in net income, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. We feel its strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • JBHT's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 2.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • HUNT (JB) TRANSPRT SVCS INC has improved earnings per share by 34.5% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, HUNT (JB) TRANSPRT SVCS INC increased its bottom line by earning $3.17 versus $2.86 in the prior year. This year, the market expects an improvement in earnings ($3.68 versus $3.17).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 33.9% when compared to the same quarter one year prior, rising from $68.66 million to $91.93 million.
  • Compared to where it was a year ago today, the stock is now trading at a higher level, reflecting both the market's overall trend during that period and the fact that the company's earnings growth has been robust. Looking ahead, the stock's rise over the last year has already helped drive it to a level which is relatively expensive compared to the rest of its industry. We feel, however, that the other strengths this company displays justify these higher price levels.
  • The debt-to-equity ratio is somewhat low, currently at 0.69, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.84 is somewhat weak and could be cause for future problems.

 

 

 

UHAL Chart UHAL data by YCharts

1. AMERCO (UHAL)
Market Cap: $6.4 billion
Rating: Buy, A
Year-to-date return: 14.5%

AMERCO operates as a do-it-yourself moving and storage operator for household and commercial goods in the United States and Canada.

"We rate AMERCO (UHAL) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, solid stock price performance, growth in earnings per share, increase in net income and reasonable valuation levels. We feel its strengths outweigh the fact that the company shows weak operating cash flow."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • UHAL's revenue growth has slightly outpaced the industry average of 1.8%. Since the same quarter one year prior, revenues slightly increased by 9.4%. Growth in the company's revenue appears to have helped boost the earnings per share.
  • Looking at where the stock is today compared to one year ago, we find that it is not only higher, but it has also clearly outperformed the rise in the S&P 500 over the same period. Although other factors naturally played a role, the company's strong earnings growth was key. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • AMERCO has improved earnings per share by 27.3% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, AMERCO increased its bottom line by earning $17.51 versus $13.56 in the prior year. This year, the market expects an improvement in earnings ($20.20 versus $17.51).
  • The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 27.4% when compared to the same quarter one year prior, rising from $52.22 million to $66.54 million.

 

 

 

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