Transportation stocks may not be the flashiest investment, but in today’s economy, they tend to be stabler and more reliable than high-flying growth stocks. Still, pinning down top transportation stocks to buy is tricky. Err on the side of caution, and your investment may flatline indefinitely; swing the other direction, and your capital could crash faster than a car hitting a massive pothole.
Generally, I’d recommend against highly regulated transportation stock sectors like airlines and rail companies. They operate nearly as much as a state apparatus as they do a private company in many cases but blend the worst of both worlds, such as limited competitive landscapes coupled with corporate malfeasance or mismanagement.
These transportation stocks to buy now are a mix of speculative and stable. Each offers a unique slice of the wider transportation sector and, blended together, represents significant upside potential buffered by longevity and relative safety.
ChargePoint Holdings (CHPT)
ChargePoint Holdings (NYSE:CHPT) is admittedly a bit of a wildcard among transportation stocks. The company and its shareholders faced significant challenges in 2023, with continued bearish sentiment keeping per-share pricing in penny stock territory. Critics point to slowing installation rates, liquidity concerns and difficulties competing with Tesla’s (NASDAQ:TSLA) extensive charging network — each point is well-founded. However, shifting economic conditions, including anticipated interest rate cuts, could provide the momentum needed for a rebound.
ChargePoint CEO Rick Wilmer has described recent quarters as a “wait and see” phase rather than a steep operational decline. Looking forward to 2024, he stated, “It’s getting better, as we’re getting more and more data around the economy, and it appears we’re heading for a soft landing.”
Competing in the electric charger installation market, particularly against giants like Tesla, which can subsidize costs through car sales, is costly. Still, a resurgence in EV sales and potential rate cuts could create new liquidity opportunities for ChargePoint and energize the transportation stock’s prospects.
U-Haul (UHAL)
As we near the summer moving season, expect to see more moving trucks on the road. Chances are, you’ll notice an abundance of U-Haul (NYSE:UHAL) rentals compared to competitors, making it a top transportation stock among non-freight residential goods movement.
Despite its dominance, U-Haul often escapes the attention of investors, even those searching for transportation stocks to buy now. Andrew Bary from Barron’s points out, “There is virtually no Wall Street coverage of U-Haul. It is run like a private company by the Shoen family, which owns about half the company.”
Despite high rates, housing activity is still rising, which could directly benefit U-Haul as more people choose cost-effective DIY moving options. Recent statistics indicate that only 22% of movers use a moving company, while 37.5% rent a truck and move themselves. With household budgets still tight, interest rate uncertainty alongside an increase in residential relocations would likely boost the preference for DIY moving, highlighting U-Haul’s strategic advantage in the market.
Brookfield Infrastructure Partners (BIP)
Brookfield Infrastructure Partners (NYSE:BIP) isn’t a pure-play transportation stock; instead, the company buys, owns and operates a range of utility and infrastructure companies that make widespread transportation possible. Better yet, Brookfield offers investors a range of globally diversified portfolio companies. Holdings include North American rail operations, Peruvian toll roads, UK ports and other companies that are vital to worldwide transportation.
Brookfield is just one of many companies facing challenges as interest rates remain higher for longer; global infrastructure is capital-intensive, and higher rates make funding tough. But these challenges don’t dampen the stock’s long-term potential. The company’s management has skillfully navigated tough economic conditions, opting to divest less profitable segments to concentrate on key growth areas. Additionally, the company plans to divest another $2 billion in assets this year, creating a substantial cash reserve poised for acquisitions as smaller companies become distressed and easier to acquire.
Today, Brookfield offers a 6.5% dividend yield and has a history of share buybacks, making it a solid income opportunity bundled with global transportation stock upside.
On the date of publication, Jeremy Flint held no positions in the securities mentioned. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.