9 Transportation Stocks for Long-Term Investors

The transportation sector has limped into 2022, battered by everything from the pandemic to the supply chain issues that followed it. But now, it appears as though the sector is set to rebound. Investors are looking closer at transportation stocks and they’re seeing opportunities for long-term buy-and-hold investments.

The transportation sector is diverse, which means there are several segments investors may find themselves drawn to. We’ve looked across each segment—commercial airlines, logistics, freight transport, railroads and beyond—to compile nine transportation stocks worth buying right now.

9. CSX Corporation (NASDAQ: CSX)

Railroads and intermodal operations are growing in importance as companies re-shore supply chains in 2022. CSX has already begun to capitalize. The company has sales of $13.12 billion with a gross operating margin of 74%. The company’s cash flows are more than strong enough to pay its healthy 1.25% dividend (dividend payout ratio of 21.50%). While the company has some long-term debts to consider, its P/E of 18 is a more than fair valuation based on its strong sales growth and EPS.

8. XPO Logistics (NYSE: XPO)

Logistics providers have suffered tremendously in 2022, but they’re finding a bottom as demand for their services ramps back up. XPO Logistics is a power play in this segment. The company has seen strong EPS growth of 39.90% over the past five years, driven by consistent quarterly sales growth of 16.20%. As a growing mid-cap company with room to run, XPO’s P/E of 8.28 makes it a very fair investment. As the company rebounds from 52-week lows, it stands to be a strong growth play even in a down market.

7. Southwest Airlines (NYSE: LUV)

While it offers fewer routes than its major competitors in the space, Southwest has financials that are more than strong enough to compete with them. The company has seen exceptional quarterly sales growth of 128.80%, leading to $18.43 billion in annual sales. The momentum for LUV is also exciting: its 200-, 50- and 20-day moving averages are all progressively more positive. With a price-to-free cash flow of 9.42, there’s an appealing case to invest in Southwest Airlines right now.

6. Expeditors International of Washington, Inc. (NASDAQ: EXPD)

Expeditors International of Washington, Inc. has one of the best financial pictures of any company on this list. The company’s sales, EPS and revenues are all up over the past five years. Not only that, but it has tremendous revenue generating potential: double-digit ROE, ROA and ROI to show for itself. The company does roughly $18 billion in annual sales, amounting to about $1.5 billion in income. At its current P/E of 12.60, this stock is a definite buy, buy, buy for investors seeking long-term exposure to the transportation sector.

5. Delta Airlines (NYSE: DAL)

While it’s currently struggling with unfavorable labor conditions (as is every airline), Delta stands as one of the best opportunities for an investment in commercial airlines in 2022. It’s doing a tremendous job of modernizing its fleet, ramping up capacity as demand for travel grows post-pandemic. Sales are up 125.30% quarter over quarter, and the company anticipates a 116.75% bump in EPS next year to show for it. While its stock price remains inflated with a P/E of 52.82, Delta is worth watching if you’re bullish on commercial air travel.

4. Schneider National, Inc. (NYSE: SNDR)

Over-the-road trucking is the backbone of the American supply chain, and Schneider National, Inc. stands as one of the biggest names in freight transport. With recent investments in the intermodal market, the company is seeking to carve inroads to the future of a growing domestic supply chain landscape. At a current P/E of 9.73, SNDR is attractive as a buy right now. Even more appealing is the 52.70% gross operating margin the company maintains on more than $6 billion in annual sales. With low debt, growing sales and good ROE, Schneider National is a strong industry-specific play.

3. FedEx Corporation (NYSE: FDX)

The last-mile market continues to boom and FedEx is one of the three primary service providers addressing this market. The company has positive momentum to show for it: EPS growth of more than 23% over the past five years, sales topping $91.68 billion and double-digit quarterly sales growth. FedEx is an attractive buy at its current P/E of 12.38, with other valuation metrics that reinforce the buy signal, including PEG and P/S both under 1. As ecommerce ramps up and demand for last mile delivery rises in tandem, FedEx will continue to see consistent growth in any market.

Investing in Transportation Stocks

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