Trinity Rewards Investors With Dividend Hike & Buyback Plan

Trinity Industries (NYSE:TRN) announced that its board of directors has approved a new share repurchase program worth $350 million. The plan, which is effective immediately, will expire on Dec 31, 2020.

Also, the transportation company raised its quarterly dividend by 31%. Notably, this Dallas, TX-based company has been consistently rewarding its shareholders for quite some time.

Twin Shareholder-Friendly Moves

This Zacks Rank #3 (Hold) company hiked its quarterly dividend to 17 cents per share (annualized 68 per share) on its $0.01 par value common stock, representing a 31% improvement from the previous payout of 13 cents per share (annualized 52 cents per share). The new dividend will be paid on Apr 30, 2019, to its stockholders of record as of Apr 15. The dividend yield based on the new payout and the Mar 7’s closing price is around 3%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

This latest dividend hike not only highlights Trinity Industries’ commitment to create value for shareholders but also underlines the company’s healthy financial condition and confidence in its business going forward.

We believe that the $350 million share buyback program to be another significant move by Trinity Industries to add value to its stockholders. It follows the completion of the $350 million accelerated share repurchase (ASR) program with JPMorgan (NYSE:JPM). The completion of the ASR, announced in November 2018, marks the expiration of the company’s buyback authorization worth $500 million of its common stock. Notably, the $500 million buyback plan was authorized by the board in December 2017.

Dividend Hikes: Not Uncommon for Transports

The current tax law, which came into force in December 2017, is a boon to transports as far as investor-oriented activities like dividend payments are concerned.

Apart from Trinity Industries, transportation players like CSX Corporation (NASDAQ:CSX) , Alaska Air Group (NYSE:ALK) and J.B. Hunt Transport Services (NASDAQ:JBHT) have also announced dividend hikes in the current year.

As investors prefer an income generating stock, a high dividend yielding one is much coveted. Needless to say that investors are always on the lookout for companies with a track record of consistent and incremental dividend payments.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>