#7 - Westinghouse Air Brake Technologies Corp. (NYSE:WAB)
The last of the railroad stocks to look at is not a pure play stock but one that is critical to the railroad industry. Westinghouse Air Brake Technologies Corp. (NYSE:WAB) provides equipment and components for new and existing freight cars. In addition to railroads, the company does business in the mining, industrial, and marine sectors.
At first glance, the stock may not hold that much appeal. It’s only had stock price growth of about 10% in the last five years. However, the company’s recent earnings reports show strong year-over-year growth in revenue and earnings. The company attributes the growth, in part, to higher operating margins. That bodes well for continued growth into 2023.
That bullish sentiment is shared by analysts from Raymond James, who gave the stock an Outperform rating and a price target of $103. That is slightly above the consensus estimate of $99 per share.
About Westinghouse Air Brake Technologies
Westinghouse Air Brake Technologies Corporation, together with its subsidiaries, provides technology-based locomotives, equipment, systems, and services for the freight rail and passenger transit industries worldwide. It offers diesel-electric, battery, and liquid natural gas-powered locomotives; engines, electric motors, and propulsion systems; and marine and mining products.
Read More - Current Price
- $199.15
- Consensus Rating
- Moderate Buy
- Ratings Breakdown
- 7 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
- Consensus Price Target
- $175.30 (12.0% Downside)
As you might guess, railroad stocks can be a cyclical industry. And during economic slowdowns, railroad stocks may struggle. However, due to the stability of their business model, there are opportunities available in the railroad sector.
The industry has also undergone consolidation over the last several decades. On the one hand that means that there are fewer railroad stocks to choose from. On the other hand, this consolidation has helped to smooth out some of the economic impact.
However, it's understandable if investors may not want to devote multiple slots in their portfolio to individual railroad stocks. This is where an exchange-traded fund (ETF) can be an appealing alternative. The iShares U.S. Transportation ETF (BATS:IYT) and the First Trust Nasdaq Transportation ETF (NASDAQ:FTXR) are two good options for investors looking for an ETF that provides exposure to the railroad sector. Like all ETFs, however, investors should remember that these ETFs are different from pure-play railroad stocks.
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