If you’ve been around my channel for any length of time, you’ll know I like trucking stocks. I’ve owned quite a few of them over the years-Schneider National Trucking, SAIA, and Marten Transport. I got out of Schneider with a small profit a few years back, but it was a frustrating experience. The stock didn’t move much the entire time I owned it; it was a case of what I THOUGHT was undervalued didn’t come to fruition (how’s that for transparency!). On the other hand, SAIA did great during the duration I held it. That brings me to my new favorite trucking stock.
Marten Transport – My Top Trucking Stock
Today I want to talk about Marten Transport (ticker symbol MRTN). I’ve held this in my portfolio for almost two years now and there are a number of reasons I continue to hold and add to it. I see amazing growth for this company. Here is how I’m breaking it down:
The company was founded in 1946 and was originally Wisconsin based. They currently have one of the lowest driver turnover rates in the business with over 400 million mile drivers. This trucking company serves primarily the United States but does run Mexico and Canada as well.
A quick summary of services Marten offers:
- Full truckload services
- Dry and Temperature Controlled
- Irregular route carrier
You can visit their site for more detailed information Marten
Now, let’s get into some fundamentals and see how their revenues, earnings, and dividend growth stack up:
Here is the chart of revenue growth over the last ten years.
As you can see, Marten has had consistent revenue growth, especially since the March 2020 crash. Last quarter saw their largest revenue growth in the history of the company; a whopping 29% increase in operating revenue. I see absolutely nothing here to concern me. The trend is headed in the right direction.
Earnings growth rates are not quite as strong as revenue growth rates; however, they still look extremely strong. An upward trend for the last two years. This last earnings report showed nearly a 52% increase in earnings year over year. This is while some of the market’s darling tech companies struggle to put out 9-12% earnings growth.
As we enter a higher interest rate environment, I believe that debt levels play an even more important role in picking stocks. We are in luck with Marten, debt levels look great. The company has no long-term debt on its books. Total liabilities are .237 Billion with .067 Billion cash on hand. I think this puts them in a position for acquisitions and to strengthen their reach in the trucking market.
At first glance, it doesn’t seem like much of a dividend stock. It currently only has a 1.39% yield. However, if you stop there and don’t look any further, you’ll miss a big surprise. A surprise dividend each and every year. The two years I’ve owned this, Marten has given me a Christmas present every year-a big ole dividend right around the end of the year. They reward their shareholders and they reward them often. As far as payout history goes-Marten has paid a dividend since 2010. As you know, we don’t want only dividends, we look for Dividend Growth. Marten is a big dividend grower. They increased their regular dividend payout by 50% in Q1 of 2022. Find a REIT or consumer staple that did that! PS: If stock buybacks are more your thing-they repurchased and retired 1.3 million shares during Q1 of 2022 as well.
The stock is up 4.22% over the last 52 weeks, not counting dividends. ITOT is down 12% over that same time. So, your money was better off being in MRTN than a total market ETF for the last year. What about over a longer time horizon? Since 2015, MRTN and ITOT are neck and neck. MRTN edges out ITOT with an 11.98% CAGR vs. 11.39%. If we zoom out even further to 2010, Marten is behind the total market by .20% CAGR. Not bound. Here is the five year chart from yahoo finance:
Why might one choose to avoid MRTN? The main risk is that we are headed into a recession which will adversely affect all trucking stocks regardless of fundamentals. Many see gas prices as a risk. This is largely passed on to the customer; however, at some point, you do wonder how much can be passed on.
On the other hand, I will tell you, if you look at the data, Marten didn’t fare too badly in the last couple of “crashes” we’ve had. It did better than a lot of tech stocks and even some consumer staples. The trucking sector isn’t going away, there will be a lot of adaption in the field; yet, the good companies have staying power.