C.H. Robinson (CHRW) Rides on Solid Freight Market, Cost Ails
C.H. Robinson Worldwide, Inc. CHRW is benefiting from improved freight market conditions and shareholder-friendly initiatives. Notably, shares of C.H. Robinson have gained 6.9% over the past three months against the 0.9% loss of the industryit belongs to.
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How is C.H. Robinson Placed?
We are impressed with C.H. Robinson’s efforts to boost its shareholder value via dividend payouts and shares repurchases are commendable. During 2021, the company returned approximately $886 million to shareholders through a combination of dividends ($277 million) and share buybacks ($609 million).
Continuing the shareholder-friendly approach, C.H. Robinson rewarded its shareholders in 2022 through a combination of cash dividends ($285.32 million) and share repurchases ($1,488.28 million). Such shareholder-friendly moves indicate the company’s commitment to creating value for shareholders and underline its confidence in its business.
With improved freight market conditions, C.H. Robinson is benefiting from higher pricing and volumes across most of its service lines. In 2022, the top line improved 6.9% owing to higher pricing in truckload, less-than-truckload and ocean services. Solid segmental growth was also witnessed in 2022.
In the North American Surface Transportation segment, total revenues were $15.82 billion (up 9.1% year over year) in 2022. Total revenues at Global Forwarding in 2022 were $6.81 billion, up 1.2% year over year.
On the flip side, an increase in operating expenses poses a threat to C.H. Robinson’s bottom line. In 2022, total operating costs increased 6.4% year over year. Costs are also likely to be high going forward.
C.H. Robinson’s liquidity position is weak. CHRW exited the fourth quarter with cash and cash equivalents of $217.48 million compared with the long-term debt of $920.04 million. This implies that the company does not have sufficient cash to meet its debt obligations.
Zacks Rank & Stocks to Consider
Currently, C.H. Robinson carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader Zacks Transportation sector are Copa Holdings, S.A. CPA, Alaska Air Group, Inc. ALK and American Airlines AAL. Copa Holdings presently sports a Zacks Rank #1(Strong Buy), while Alaska Air and American Airlines currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Copa Holdings has an expected earnings growth rate of 39.83% for the current year. CPA delivered a trailing four-quarter earnings surprise of 33.35%, on average.
The Zacks Consensus Estimate for CPA’s current-year earnings has improved 21.1% over the past 90 days. Shares of CPA have soared 13.3% over the past three months.
Alaska Air has an expected earnings growth rate of 32.64% for the current year. ALK delivered a trailing four-quarter earnings surprise of 8.98%, on average.
The Zacks Consensus Estimate for ALK’s current-year earnings has improved 11.4% over the past 90 days. Shares of ALK have soared 0.8% over the past three months.
AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 7.79%, on average.
The Zacks Consensus Estimate for AAL’s current-year earnings has improved 31.1% over the past 90 days. Shares of AAL have gained 15.8% over the past three months.
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C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
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