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Old Dominion Freight Line, Inc. (ODFL) has been benefiting from its consistent shareholder-friendly measures through dividends and share buybacks. In 2023, ODFL paid dividends of $175.08 million and repurchased shares worth $453.61 million despite the weakness pertaining to freight demand. Further, ODFL’s board has raised its quarterly cash dividend by 30% to 52 cents per share, effective from first-quarter 2024. In 2023, ODFL's board approved a new share repurchase program that authorizes the company to buy back up to $3 billion of its outstanding stock.

During the first quarter of 2024, ODFL paid out dividends worth $56.6 million and repurchased shares worth $85.3 million. Such shareholder-friendly moves instill investor confidence and positively impact the company's bottom line.

ODFL’s liquidity position raises optimism in the stock. At the end of the first quarter of 2024, the carrier’s cash and cash equivalents stood at $580.97 million, higher than the long-term debt of $59.98 million, implying that the company has enough cash to meet its debt obligations.

Old Dominion 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 2.81%.

On the flip side, high capital expenditures might hurt ODFL's bottom line. For 2024, ODFL anticipates its total capital expenditures to be approximately $750 million. Of the total, $350 million is expected to be invested in real estate and service center expansion projects, $325 million in tractors and trailers, and $75 million in information technology and other assets.

The truck industry, of which Old Dominion is an integral part, has been persistently battling driver shortage for several years. As old drivers are retiring, trucking companies are finding it challenging to hire new drivers since the job primarily does not appeal to the younger generation.

Zacks Rank and Stocks to Consider

ODFL currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include GATX Corporation GATX and Trinity Industries, Inc. (TRN). Each stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

GATX has an encouraging earnings surprise history. The company has surpassed the Zacks Consensus Estimate in three of the last four quarters (missing the mark in the other). The average beat is 7.49%.

The Zacks Consensus Estimate for 2024 earnings has been revised 3% upward over the past 90 days. GATX has an expected earnings growth rate of 6.79% for 2024. Shares of the company have risen 18.4% in the past year.

Trinity raised 2024 earnings per share guidance to the range of $1.35 to $1.55 (which excludes items outside of the company’s core business operations) from $1.30 to $1.50 guided previously.

Over the past 30 days, the Zacks Consensus Estimate for TRN’s 2024 earnings has been revised 2.7% upward. For 2024, TRN’s earnings are expected to grow 8.70% year over year.

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Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.