Top Best Rail Stocks Right Now • Daily Update • Benzinga

Rail stocks are among the most established securities in our investment market. Railroads were the primary form of commercial transportation during the Industrial Revolution, and they remain essential to the global consumer economy today, even in a world of drone delivery and spaceflight. If you’re looking for rail stocks under $10, this might not be the industry for you.

Rail stocks have traditionally been a safe haven for cash flow investors and are well known for their regular dividends. Perhaps that’s why Warren Buffett has continued to hold Berkshire Hathaway’s position in BNSF Railway Co., even as he emptied other transportation industry stocks entirely during the coronavirus pandemic. However, many investors are taking advantage of macroeconomic shocks and new technologies to derive capital gains from railway investments.

Remember that rail operators are still essential to the supply chain and the economy as a whole. Every investor has seen a train pass by on their daily commute, and these trains often bring the goods you need to your town. However, the railways have problems generating revenue as the network does not grow and the locomotives age. How can investors split the difference and avoid losses?

Quick look at the best railroad stock:

  • South Norfolk
  • Canadian National Railway Company
  • Warner
  • Union Pacific
  • Trinity Industries Inc.

Snapshot: Rail Stocks

Railroad stocks were the primary trading security during the 1800s. Mohawk & Hudson, the first railroad stock, traded on the NYS&EB, a precursor to the New York Stock Exchange (NYSE). Speculation in railroad stocks caused the bankruptcy of Jay Cooke & Company, a major financial firm in Philadelphia in 1873. The NYSE closed for 10 days in the aftermath. Over the next few decades, railroad stocks would be a vital part of railroad financing and the fortunes of the Vanderbilts, Goulds, and Huntingtons.

Consumer service has always maintained the bottom line in the rail business, but technology has always been the engine of its growth. Railroads that offer investors excellent returns today are incorporating Precision Scheduled Railroading (PSR). PSR enables more efficient use of assets, improving cost to income and overall profitability. Greater efficiency also protects the business from revenue losses that typically correspond with economic downturns. This leads to better earnings per share and higher returns for investors.

Remember, however, that railroad stocks can be quite volatile. Yes, Warren Buffett has made quite a bit of money in this business, but the industry could go south at any time. Moreover, if progressive policies calling for high-speed rail prevail, it is more likely that the industry will grow even more. Otherwise, it is possible that companies like UPS and FedEx will improve their airline fleets and push for air freight to make a dent in the rail sector.

Best Online Brokers for Rail Stocks

Because railroads have been established as the cornerstone of the stock market, they are all commonly available on the majority of online brokers. Even if you are in the United States, you can easily invest in railways based in Canada or Hong Kong. Railways were essential in establishing the international connection between the securities markets of different countries. This relationship is far too established to break easily.

Because you can find your chosen railroad stocks on virtually any broker, you have more leverage in choosing that broker based on their individual idiosyncrasies. Regardless of the quality of stock you have chosen, you still need excellent execution to make profits in the stock market. You get great execution with the tools provided by your broker.

Take a look at this online broker comparison chart and choose based on which features complement your trading style.

Features To Look For In Railroad Stock

Here are some important characteristics to look for in railroad stocks.

  1. Railway line mileage: The more rail miles a company has under its control, the more access it has to deliver goods. More mileage also means less congestion on its tracks, so goods move faster.
  2. Dividend history: Railroad companies are known for their regular dividends. Whether you want a growth stock or not, you should always look for a company to hold or grow its dividends over time in this industry.
  3. Implementation technology: The rail industry is constantly updating its technology. To stay competitive, businesses need to keep abreast of more efficient ways to transport goods and conduct their operations.
  4. Economic health: Stocks tend to grow with the economy, and with the railways serving as the backbone of the logistics industry, poor economic performance could lead to poor stock performance in this sector.

I worked on my profits

Unless you bought during the lowest point of the March lows, you won’t find railroad stocks under $5. You can still find great deals with leverage for capital gains and dividends. We could see new highs for the entire industry as the United States returns to work after social distancing. Otherwise, investors have a stable dividend to fall back on.

Frequently Asked Questions


Are rail stocks worth it?


Rail stocks can be worth the investment, but you need to do your research and understand how the overall market is performing.


Are rail stocks expensive?


Shares of a major industry vary greatly in price. Rail stocks can be considered cheap or expensive depending on where they are and how the market is moving.


What are the best rail stocks?


Check out the list of Benzinga recommended rail stocks in the list above.


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