01-19-2021, 11:14 PM
Good idea for a new thread.
I view most transportation companies as utilities, I'm not sure if that is a very accurate comparison but the business model certainly seems similar. I'm not sure how well some of the transport companies would do during a recession though, as the amount of things being transported could fall severely.
Looking at railway stocks, they all seem to be perpetually overvalued though. Currently looks like P/E numbers are around 30 and dividends are below 2% for most. I actually didn't expect the div growth rates to be so high, the couple that I checked out (UNP, CP) seem to have it around 15%. Indeed that does make it look much more appealing.
I've decided to be lazy on this sector and just buy BIP. And so far it has worked well for me. They have a bit of everything, toll roads, rail roads, energy infra, telecom towers, data centers, ports etc. So quite well diversified and they have a pretty ambitious plan of buying assets, improving their efficiency etc. while collecting dividends, and then selling the asset and recycling the cash into another asset where they see a lot of potential for improvements. So far, it has worked well but I guess it is a bit more risky than just doing the whole buy & hold thing.
I view most transportation companies as utilities, I'm not sure if that is a very accurate comparison but the business model certainly seems similar. I'm not sure how well some of the transport companies would do during a recession though, as the amount of things being transported could fall severely.
Looking at railway stocks, they all seem to be perpetually overvalued though. Currently looks like P/E numbers are around 30 and dividends are below 2% for most. I actually didn't expect the div growth rates to be so high, the couple that I checked out (UNP, CP) seem to have it around 15%. Indeed that does make it look much more appealing.
I've decided to be lazy on this sector and just buy BIP. And so far it has worked well for me. They have a bit of everything, toll roads, rail roads, energy infra, telecom towers, data centers, ports etc. So quite well diversified and they have a pretty ambitious plan of buying assets, improving their efficiency etc. while collecting dividends, and then selling the asset and recycling the cash into another asset where they see a lot of potential for improvements. So far, it has worked well but I guess it is a bit more risky than just doing the whole buy & hold thing.