Yahoo Finance Here's Why Investors Should Retain Ryder (R) Stock Now
Ryder's R strong segmental performance by Dedicated Transportation Solutions and Supply Chain Solutions is boosting its top line. Shareholder-friendly efforts are also praiseworthy. However, the company is grappling with low liquidity.
Factors Favoring R
Ryder consistently strives to reward its shareholders through dividends and share repurchases. In 2023, 2022 and 2021, the company paid out dividends totaling $128 million, $123 million and $122 million, respectively, and repurchased shares worth $337 million, $557 million and $57 million, respectively. These initiatives not only bolster investor confidence but also positively impact the bottom line. In the first quarter of 2024, Ryder paid out dividends of $35 million and repurchased shares worth $51 million.
In the first quarter of 2024, Ryder reported total revenues of $3.1 billion, representing a 3.3% year-over-year increase, driven by strong performance across its segments. The company's adjusted operating revenues rose to $2.5 billion, reflecting 6% year-over-year growth, recent acquisitions and contractual revenue growth, partially offset by lower commercial rental revenues in Fleet Management Solutions.
Shares of R have rallied 45.4% in the past year compared with its industry’s growth of 37% in the same period.
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Key Risks
Ryder’s results are being hurt by the weak market conditions in used vehicle sales and rental. As evidence, Ryder's first-quarter 2024 earnings per share of $2.14 plunged 23.8% year over year.
The company’s financial position is also weak. As a reflection of this, at the end of the first quarter of 2024, R’s cash and cash equivalents stood at $234 million, much lower than the total debt (including the current portion) of $7.5 billion. Moreover, Ryder’s current ratio (a measure of liquidity) stood at 0.8 at the end of the first quarter of 2024, further raising liquidity concerns. A current ratio of less than 1 indicates that the company does not have enough cash to meet its short-term obligations.
Zacks Rank
R currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include SkyWest SKYW and Kirby Corporation KEX, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
SkyWest has an expected earnings growth rate of 787% for the current year.
SKYW has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 128%. Shares of SkyWest have jumped 104.2% in the past year.
KEX has an expected earnings growth rate of 42.5% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 10.3%. Shares of Kirby have climbed 58.8% in the past year.
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Ryder System, Inc. (R) : Free Stock Analysis Report
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