Take A Ride On The Railroads: If You Pass Go, Collect Dividends


We thought it would be a good idea to focus on the railroad sector for a change.

This is a natural fit for us, since we recently covered the lodging REIT sector.

Today, we’ll focus on three best-in-breed railroad stocks.

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Marco Rosario Venturini Autieri/iStock Unreleased via Getty Images This article was co-produced with Nicholas Ward.

Roughly a year ago, as a part of the Monopoly Man series we published at iREIT on Alpha – which focused on the highest-quality stocks and best values we saw in each subsector of REIT-dom – we put together a report on the railroad industry.

After all, you can’t talk about Monopoly without highlighting the railroads.At the time, we acknowledged that they were trading with premium valuations. Yet we concluded that piece on a bullish note: “With that in mind, if you’re looking to put cash to work outside of the REIT space… you may want to take a page out of Hasbro’s book and add a railroad or two to your watchlist.” We also touched on the strong dividend growth that these stocks were likely to produce for investors, saying that: “These stocks appear to be primed to generate strong returns over the next several years.” So what’s happened since then? The Engines That Could Now, when we published that article, we admittedly underestimated how much macro supply chain disruptions there would be. The epic port backups we’ve witnessed along the West Coast over the last year have certainly hurt intermodal shipment volumes.Even so, class 1 rails have largely continued to increase their efficiency numbers – and therefore higher cash flows too – even […]

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