Chicago, IL – August 10, 2022 – Zacks Equity Research shares C.H. Robinson Worldwide CHRW as the Bull of the Day and Garmin Ltd. GRMN as the Bear of the Day. In addition, Zacks Equity Research provides analysis on Ethan Allen Interiors ETD, Pioneer Natural Resources PXD and EOG Resources EOG.
Here is a synopsis of all five stocks:
C.H. Robinson Worldwide is one of the largest logistics platforms on the planet. CHRW stock is bucking the downward trend of 2022 and its recent surge sent C.H. Robinson to new all-time highs.
With C.H. Robinson, investors would add solid long-term growth potential inside an integral industry, alongside dividends, solid value, and much more.
C.H. Robinson is one of the world's largest logistics platforms, with nearly $30 billion in freight under management. The company provides freight transportation and logistics, as well as outsource solutions, information services, and beyond to roughly 100,000 global customers.
C.H. Robinson provides access to 85,000 transportation providers worldwide, including contract motor carriers, railroads, air freight carriers, and ocean carriers. The company is also bullish that its low single-digit market share provides it a "great opportunity" to continue to grow across all services. C.H. Robinson's expansion efforts include a big push to boost its office network outside of North America.
In general, the third-party logistics industry presents room for continued expansion in a globally-interconnected world, where streamlined shipping and transportation services are paramount. C.H. Robinson's revenue climbed 6% in 2020 and a whopping 43% in 2021 to surge from $16 billion in total fiscal 2020 sales to $23 billion last year.
C.H. Robinson topped our Q2 earnings and revenue estimates on July 27 and it provided upbeat guidance in the face of economic slowdown fears. Higher pricing across most of its services and higher truckload and ocean volume helped drive its strong top and bottom line showing in Q2 and across the entire first half.
C.H. Robinson's consensus Zacks EPS estimates for Q3 is now up over 20% since its second quarter release, with its fiscal 2022 earnings estimate around 14% higher and FY23 up 5%. CHRW's bottom-line positivity helps it land a Zacks Rank #1 (Strong Buy) at the moment.
Zacks estimates call for C.H. Robinson's revenue to climb another 15% in 2022 to hit $26.5 billion to help lift its adjusted earnings by 35%. The company is expected to see its earnings and revenue fall in 2023 as it faces a string of very difficult to compete against years of growth.
That said, C.H. Robison could easily post far-stronger-than-projected earnings results going forward, having topped our quarterly EPS estimates by over 31% in three out of the last four quarters—including a 38% Q2 beat.
C.H. Robison's executive team acknowledged the lingering questions regarding global economic growth, inflation, and consumer discretionary spending when it reported its financial results on July 27. The company noted that its "flexible non-asset-based business model" helps it deal with some of the inflationary pressures. CHRW remains focused heavily on finding ways to thrive at all times and "maximize long-term shareholder returns through all phases of the business cycle and various economic scenarios."
For instance, C.H. Robison's been returning tons of value to shareholders, including nearly $340 million worth of share repurchases last quarter. When factoring in its quarterly dividend payment, the company returned 100% more cash to shareholders YoY in Q2. And despite economic headwinds, the firm upped its capital expenditures outlook for 2022, as it invests in a "higher level of internally developed software."
C.H. Robison's 2% dividend yield tops the S&P 500's 1.5% and many other firms in its highly-ranked Transportation – Services industry. The space currently sits in the top 17% of over 250 Zacks industries right now. CHRW's dividend yield looks even stronger considering the stock is up nearly 5% in 2022 vs. its industry's 9% drop and the market's 14% fall.
Investors should know that the stock has ripped above both its 200-day and 50-day moving averages recently. C.H. Robinson shares are up 25% in the last year, and they closed regular trading Tuesday near fresh records at $111.96 per share.
Stretching our view back, C.H. Robinson stock is up 110% in the last 10 years and 72% in the past five to nearly match the benchmark—with it up over 2,000% in the last 25 vs. the S&P 500's 460%.
Even with the impressive run and the outperformance, C.H. Robinson is trading at close to a 50% discount to its own 5-year highs in terms of forward earnings at 15.2X. Better still, CHRW stock is trading right near its lowest levels in the last 15 years. This also represents a discount to the S&P 500 and comes not too far above its Zacks Econ sector, even though it has crushed the space when it comes to price performance.
Garmin Ltd. is likely best-known for its consumer-centric GPS systems. Garmin is much more than that, selling advanced radars for airplanes and beyond. Still, the company faces tough-to-compete against periods, and GRMN provided downbeat guidance on July 27.
Garmin has been at the cutting-edge of the modern consumer-focused GPS movement for years. The firm's in-car navigation systems, fitness wearables, smartwatches, and more are staples in our connected world.
Along with its everyday consumer electronics, Garmin sells high-end fish finders, advanced radars and systems for boats and airplanes, and even sci-fi-sounding tech for flying taxis. Its diverse and compelling offerings have helped GRMN post six-straight years of revenue growth, with double-digit expansion in the trailing three years.
Garmin's revenue climbed 19% in 2021 for its best showing in over a decade. But Garmin's second quarter sales slipped 6.5% from the year-ago period and its earnings outlook has turned far worse since its Q2 financial release on July 27.
GRMN lowered its guidance, with its FY22 and FY23 consensus EPS estimates down 13% and 15%, respectively over the past few months. And its most accurate/most recent EPS estimates are even lower. "Markets continue to normalize following two years of pandemic driven growth, and we also face additional headwinds including the relentless strengthening of the U.S. Dollar, high inflation, and rising interest rates," CEO Cliff Pemble said in prepared remarks.
Garmin's long-term outlook likely remains firmly intact, but its downward earnings revisions help it grab a Zacks Rank #5 (Strong Sell) at the moment. GMRN's industry is also currently in the bottom 23% of over 250 Zacks industries.
Garmin stock tumbled roughly 42% from its August 2021 records, with it down 7% over the past 24 months. The selling recalibrated its valuation in a big way, trading at 18.4X forward earnings vs. its 28.9X highs and decade-long median of 19.1X. And its 3% dividend yield is a nice bonus.
All that said, investors with near-term outlooks might want to navigate in a different direction for now, even if they decide to keep Garmin on their radar.
There's a large variety of investors out there. Some prefer to target growth, and some prefer to target value. However, some choose to target income, looking to receive a steady stream of income from their investments.
Of course, everybody loves getting paid. The feeling is even sweeter when the payouts come from your investments. Income investors typically look for companies with a track record of increased dividend payouts, strong cash flows, and high yields.
When companies have a spectacular quarter, they sometimes reward shareholders via a special dividend, allowing shareholders to benefit from the substantial profit. To income investors, it feels like the cherry on top.
We've gotten several special dividend announcements as of late, coming from companies including Ethan Allen Interiors, Pioneer Natural Resources and EOG Resources.
Let's take a look at their recent announcements and a few other aspects of their recent quarterly prints to see how the companies currently stack up.
Ethan Allen Interiors
Ethan Allen Interiors is a leader in interior design, selling a full range of home furnishings through a retail network of design centers and its online website.
On August 2nd, it was announced that the company's Board of Directors had declared a $0.50 per share special cash dividend, payable on August 30th to shareholders of record as of August 16th. The special dividend is paired along with its regular quarterly cash dividend of $0.32 per share.
The company had a stellar Q4 2022. ETD ended the quarter with a strong balance sheet, including cash and investments of $121 million as of June 30th and no debt.
Furthermore, quarterly earnings of $1.25 per share crushed the Zacks Consensus EPS Estimate of $0.80 by a substantial 56%. Quarterly sales came in hot as well – 2022 Q4 revenue of $229 million handily beat the $197 million Zacks Consensus Estimate.
Pioneer Natural Resources
Pioneer Natural Resources operates as an independent oil and gas exploration and production company in the United States.
In its latest quarter, PXD announced that its Board of Directors had declared a quarterly base-plus-variable cash dividend of $8.57 per share ($1.10 base dividend and a $7.47 variable dividend). The dividend is payable September 16, 2022, to stockholders of record at the close of business on September 6, 2022.
In addition, quarterly free cash flow was reported at a strong $2.3 billion, reflecting a massive 225% year-over-year uptick. The company's durable free cash flow enables rich dividends at different commodity prices.
PXD reported quarterly earnings of $9.36 per share in its latest print, good enough to exceed the Zacks Consensus EPS Estimate of $8.81 by a solid 6.3%. Quarterly sales of $6.9 billion came in marginally under expectations.
EOG Resources
EOG Resources is primarily involved in exploring and producing oil and natural gas. The leading upstream energy player's operations are spread across the United States, China, and Trinidad.
On August 4th, EOG announced that shareholders of record as of September 15th would receive a special cash dividend of $1.50 per share on September 29th. In addition, the company will consider the quarterly regular dividend in September.
EOG Resources has an exceptional balance sheet paired with a commitment to return a minimum of 60% of its annual free cash flow to shareholders. In its latest earnings release, quarterly free cash flow was reported at $734 million, a solid 8.4% year-over-year uptick.
In the latest print, EOG reported quarterly earnings of $2.74 per share vs. expectations of $2.99 per share, reflecting an 8.3% bottom-line miss. However, quarterly revenue came in at a robust $7.4 billion, reflecting a strong 11.5% top-line beat.
Dividends are a major perk that carry massive benefits for investors. It provides a reliable income stream, helping alleviate drawdowns in other positions.
When companies have an incredible quarter, they'll sometimes shell out special dividend payouts, making any income investor ecstatic. Simply put, it's the cherry on top.
All three companies above – Ethan Allen Interiors, Pioneer Natural Resources and EOG Resources – have announced special dividend payouts on the back of stellar quarterly results.
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Garmin Ltd. (GRMN) : Free Stock Analysis Report
Pioneer Natural Resources Company (PXD) : Free Stock Analysis Report
C.H. Robinson Worldwide, Inc. (CHRW) : Free Stock Analysis Report
EOG Resources, Inc. (EOG) : Free Stock Analysis Report
Ethan Allen Interiors Inc. (ETD) : Free Stock Analysis Report
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