In a shareholder-friendly move, Wabtec Corporation’s (WAB) board of directors approved a dividend hike of 25%, thereby raising its quarterly cash dividend to 25 cents per share ($1.00 annualized) from 20 cents ($0.80 annualized). The raised dividend will be paid out on March 7, 2025, to shareholders of record at the close of business on Feb. 21. The move reflects WAB’s intention to utilize free cash to enhance its shareholders’ returns.

Wabtec Dividend Yield (TTM)

Wabtec dividend-yield-ttm | Wabtec Quote

Notably, Wabtec has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging.

During 2021, the company rewarded its shareholders through a combination of cash dividends ($92 million) and share repurchases ($300 million). Continuing the shareholder-friendly approach, WAB rewarded its shareholders in 2022 through a combination of cash dividends ($111 million) and share repurchases ($473 million). During 2023, WAB repurchased shares worth $409 million and paid $123 million in cash dividends. During the first nine months of 2024, WAB repurchased shares worth $974 million and paid $106 million in the form of dividend payments.

Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks, like WAB, are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario. 

WAB’s management decision to increase its quarterly dividend payout reflects the company’s commitment to boosting shareholder value apart from underlining confidence in its business. We believe such shareholder-friendly initiatives should boost investor confidence and positively impact this Zacks Rank #3 (Hold) company’s bottom line.

Given this encouraging financial news, we are looking forward to Wabtec’s fourth-quarter 2024 earnings release, which is scheduled for Feb. 12, 2024.

WAB is not the only player from the Zacks Transportation sector that has rewarded its shareholders with dividend payouts or share buyback programs.

Recently, United Parcel Service, Inc.’s (UPS) board of directors approved a dividend hike, thereby raising its quarterly cash dividend to $1.64 per share ($6.56 annualized) from $1.63 ($6.52 annualized). The raised dividend will be paid out on March 6, 2025, to shareholders of record at the close of business on Feb. 18.

Stocks to Consider

Investors interested in the Zacks Airline industry may also consider United Airlines UAL and SkyWest SKYW. Each stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

United Airlines has an expected earnings growth rate of 21.11% for the current year. The Zacks Consensus Estimate for UAL’s 2025 earnings has been revised 10.6% upward in the past 60 days.

The company has an encouraging track record with respect to earnings surprises, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 22.93%. Shares of UAL have surged 161.2% in the past year.

SkyWest, founded in 1972, is based in St. George and operates regional jets for major U.S. airlines. SKYW’S track record of successfully meeting the requirements of each of its airline heavyweight partners bodes well for the company. Revenues from flying agreements (which account for the bulk of the top line) are impressive owing to SKYW’s above ability. Owing to an uptick in air travel demand, passenger volumes have been upbeat and are likely to increase going forward as well. This is likely to keep SKYW's top line in good shape.

SKYW has an impressive earnings surprise history. The company's earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 16.71%. The Zacks Consensus Estimate for 2025 earnings has been revised 7.9% upward in the past 60 days.

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United Airlines Holdings Inc (UAL) : Free Stock Analysis Report

United Parcel Service, Inc. (UPS) : Free Stock Analysis Report

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Wabtec (WAB) : Free Stock Analysis Report

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