Wabtec Reaches 52-Week High: What's Aiding the Stock?
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Shares of Westinghouse Air Brake Technologies Corporation, operating as Wabtec Corporation (WAB), scaled a 52-week high of $184.11 in the trading session on Sept. 26, 2024, before closing a tad lower at $182.27.
Let’s delve deeper to find out the factors working in favor of Wabtec stock.
Why the Uptick in the WAB Stock?
Wabtec’s top line has been benefiting from higher sales across its Freight and Transit segments. While the Freight segment benefits from growth in services and components, the transit segment gains from strong aftermarket and original equipment manufacturing sales. WAB is expected to continue its strong performance due to strong underlying demand and a robust backlog.The ongoing summer season is expected to provide a further boost to revenues.
Driven by this encouraging backdrop, management raised its current-year earnings per share (EPS) guidance. Wabtec raised 2024 EPS guidance to the range of $7.20-$7.50 from $7.00-$7.40 guided previously. The Zacks Consensus Estimate of $7.46 lies within the updated guided range.
Wabtec’s full-year revenue guidance remains unchanged in the $10.25 billion-$10.55 billion band. The Zacks Consensus Estimate of $10.39 billion lies within the guided range.
Highlighting its pro-investor stance, Wabtec (on Feb. 14, 2024) announced a 17.6% dividend increase, thereby raising its quarterly cash dividend from 17 cents per share to 20 cents. This quarterly dividend of 20 cents (80 cents annualized) per share gives Wabtec a 0.47% yield at the current stock price. This company’s payout ratio is 11%, with a five-year dividend growth rate of 12.34%.
Westinghouse Air Brake Technologies Corporation Dividend Yield (TTM)
Westinghouse Air Brake Technologies Corporation dividend-yield-ttm | Westinghouse Air Brake Technologies Corporation Quote
Wabtec’s bottom line has been benefiting from its consistent efforts to reward its shareholders through dividends and share buybacks. In 2022, WAB paid dividends of $111 million and repurchased shares worth $473 million. In 2023, WAB paid dividends of $123 million and repurchased shares worth $409 million. During the first six months of 2024, WAB paid dividends of $71 million and repurchased shares worth $375 million. Such shareholder-friendly moves instill investors’ confidence and positively impact the company’s bottom line.
Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks, like WAB, are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty like the current scenario.