GATX's Shares Up 11.3% In 3 Months: Whats Driving The Stock?

Shares of GATX Corporation (NYSE:GATX) gained 11.3% over the last three months, outperforming the Zacks Equipment and Leasing industry, which declined 5.9% in the same time period.

Let’s take a look at the factors responsible for the impressive price performance.

In January, GATX reported higher-than-expected revenues for the fourth quarter of 2017. The strong performance of the Rail North America segment, which accounts for a bulk of GATX’s revenues, aided results.

The company’s strong product portfolio is encouraging as well. Moreover, its efforts to modernize the fleet, particularly at its Rail Europe division, raise optimism in the stock.

We are impressed by the company’s efforts to reward its shareholders through share buybacks and dividend payments. We note that the company has been paying regular dividends, continuously since 1919. In January 2018, it raised the quarterly dividend by 5% to 44 cents per share. During 2017, it bought back shares worth $100 million.

The new tax law is a blessing for transportation companies like GATX. The huge savings, induced by the new law, may result in an improvement in these shareholder-friendly activities. Apart from GATX, transportation stocks like Union Pacific Corporation (NYSE:UNP) , Norfolk Southern Corporation (NYSE:NSC) and J.B. Hunt Transport Services (NASDAQ:JBHT) also hiked their dividend payouts this year.

Estimate Revisions

Upward estimate revisions reflect optimism in a stock’s prospect. GATX scores impressively on this front too. In fact, this Zacks Rank #2 (Buy) company has seen the Zacks Consensus Estimate for current-quarter and current-year earnings being revised 6.4% and 8.8% upward, respectively, in the last 90 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Additionally, the stock has a Value Score of A.

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