Stocks of companies that facilitate transportation are collectively known as transport stocks. They include stocks of railroad companies, railway operators, airlines, freight carriers, transportation manufacturers, and logistics providers.
Transportation forms the backbone of many industries and sectors as all goods and products need to be transported from one place to another. It is critical for the overall economic growth of a country. Therefore, transport stocks become an excellent addition to the investment portfolio of investors looking for stable, long-term returns, and regular income.
The transportation industry has demonstrated accelerated growth in 2019 and is expected to generate over $1.3 trillion in revenues. With the growing demand, the future of transport stocks looks optimistic.
Factors to Consider Before Investing in Transport Stocks
Transport stocks are known to generate high returns at low risks. However, investors must consider that the performance of transport stocks is linked to the growth and decline in other industries, including manufacturing, agriculture, travel, and many more. Therefore, the overall economic and geopolitical conditions of the country and the world should be considered before investing in transport stocks.
The financial health of transportation companies should also be taken into account before investing in transport stocks. Investors must analyze fundamentals like earnings and revenue growth, dividend yield, and P/E ratio. Technical analysis based on past trends also serves well to predict the future performance of transport stocks.
Which Transport Stocks Should I Buy?
Among the multiple transport stocks trading on the stock exchanges, we have shortlisted the best transport stocks for you to select from. Some of the stocks belong to large and stable companies that promise long-term returns with low risks, while others are more suitable for income investors looking for high payout to shareholders.
Investors must understand that transport stocks undergo cyclical ups and downs and require extensive analysis before investing in them. Therefore, investment in transport stocks should be based on in-depth fundamental and technical analysis, in addition to a thorough understanding of the macroeconomic conditions.