We recently published a list of 10 Best Railroad Stocks To Buy Now. In this article, we are going to take a look at where Trinity Industries, Inc. (TRN) stands against other best railroad stocks to buy now.
In February, the Association of American Railroads reported that intermodal volumes remained robust, rising 6.4% year-over-year. Weekly originations hit an all-time high in February, averaging 276,654 units. This growth was fueled by steady consumer spending and some importers ordering extra shipments ahead of possible tariffs. So far in 2025, intermodal volume is up 8.5%, and container volume has jumped 9.5%, setting a new record for this period. Moving forward, intermodal growth will depend on consumer demand, which is closely tied to job market strength and potential trade policy shifts.
However, American railroads experienced a 4.5% drop in carloads, moving 843,618 units in February. In the last five months, January had the first increase in carloads, but harsh winter weather, including flooding in the Northeast and freezing temperatures across most of the country, interrupted operations and obstructed freight handling. Without these weather challenges, rail volumes likely would have been higher. Coal being the largest commodity moved by rail continued its downward trend, with carloads dropping 8.2% in February and marking the 14th consecutive month of declines.
As the US ramps up its trade war under President Trump, freight railroads are preparing for the fallout. New tariffs on Mexico, Canada, China, and the EU are set to take effect soon, potentially disrupting a massive trade network. In 2024, American railroads handled $203.1 billion in cross-border trade with Canada and Mexico, being almost evenly split between the two, as reported by CNBC. The rail industry is a huge economic driver, generating $233.4 billion in output and supporting around 750,000 jobs in 2023. Texas is a major hub for freight rail employment since it handles most of the US to Mexico rail traffic. Railroads also reinvested $26.8 billion in infrastructure last year, mostly through private funding. As trade tensions rise, the industry remains focused on keeping goods moving and ensuring rail infrastructure stays strong.
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Our Methodology
For this article, we focused on making a list of all railroad and railcar stocks that are publicly listed in the United States. Using Insider Monkey’s Q4 2024 hedge fund database, we examined the hedge fund sentiment for each stock and selected 10 most popular ones. The stocks are ranked in ascending order based on the number of hedge fund holders as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
Trinity Industries, Inc. (NYSE:TRN)
Number of Hedge Fund Holders: 20
Trinity Industries, Inc. (NYSE:TRN) offers rail transportation products and services in North America. It has two main divisions, one for leasing and managing railcars and another for manufacturing and servicing them. On December 5, 2024, the company raised its quarterly dividend to $0.30 per share, up from $0.28 in the last quarter. This marks the company’s 243rd consecutive dividend payment. The cash dividend was distributed on January 31, 2025, to shareholders on record as of January 15. TRN is one of the best railroad stocks to watch out for.
Trinity Industries, Inc. (NYSE:TRN) had strong financials in 2024, with adjusted EPS rising 32% to $1.82, driven by higher lease rates, improved margins, and increased external repairs. The Railcar Leasing and Services Group ended the year with a 10% revenue increase, repricing over half its fleet at higher rates while maintaining strong utilization. In 2025, Trinity anticipates approximately 35,000 railcar deliveries, $300-$400 million in net fleet investment, $45-$55 million in capital expenditures, and EPS between $1.50 and $1.80.
Among the hedge funds tracked by Insider Monkey, 20 funds were bullish on Trinity Industries, Inc. (NYSE:TRN) in Q4 2024, compared to 22 funds in the prior quarter. Encompass Capital Advisors was the leading stakeholder of the company, with nearly 2 million shares worth $70 million.
Overall, TRN ranks 8th on our list of best railroad stocks to buy now. While we acknowledge the potential of TRN to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than TRN but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
