Updated 3/6/25
C.H. Robinson Worldwide (CHRW) has built a strong reputation in the logistics and freight industry, serving as a critical link in the global supply chain. The company specializes in third-party logistics, helping businesses move goods efficiently across various transportation modes.
For dividend investors, CHRW offers a mix of income stability and industry resilience. It has maintained a steady dividend payout, but with shifting market conditions, it’s important to evaluate whether it remains an attractive long-term dividend stock. Let’s dive into its dividend performance, financial health, and overall outlook.
Key Dividend Metrics
📈 Forward Dividend Yield: 2.53%
💰 Annual Dividend Payout: $2.48 per share
🔄 5-Year Average Yield: 2.40%
📊 Payout Ratio: 63.73%
🗓 Next Dividend Payment Date: April 1, 2025
🚨 Ex-Dividend Date: March 7, 2025
Dividend Overview
CHRW has a forward dividend yield of 2.53%, sitting slightly above its five-year average. This suggests a stable payout history, making it an appealing option for income-focused investors. The company’s commitment to dividends remains strong, though growth has been more measured in recent years.
With a payout ratio of 63.73%, CHRW is distributing a reasonable portion of its earnings as dividends while still retaining enough capital for operations and growth. This level is sustainable, but it does indicate that any future increases might be modest rather than aggressive.
Another positive sign is the high level of institutional ownership, which exceeds 96%. This suggests confidence in CHRW’s financial stability and long-term prospects. However, with a debt-to-equity ratio over 100%, the company’s reliance on debt should be closely watched.
Dividend Growth and Safety
One of the most important aspects of dividend investing is consistency, and CHRW has a track record of maintaining its payouts. While it may not be a high-growth dividend stock, it has steadily rewarded shareholders over time.
- The latest trailing 12-month dividend sits at $2.46 per share
- The five-year average dividend yield of 2.40% shows reliability
- Recent dividend increases have been small but consistent
A company’s ability to sustain dividends depends on cash flow, and CHRW generates solid cash from operations. With $509 million in operating cash flow and $390 million in free cash flow, there is a comfortable cushion to cover dividends. That said, the transportation industry can be cyclical, and economic downturns may put pressure on future payouts.
Investors looking to receive the next dividend must own shares before the ex-dividend date on March 7, 2025.
Chart Analysis
Moving Averages
The 50-day simple moving average (orange line) is trending downward and is now hovering just above the stock price. This suggests that short-term momentum is weakening. The 200-day moving average (blue line), on the other hand, is still rising, reflecting longer-term strength. However, the fact that the stock is now sitting right around these key moving averages could indicate a potential turning point. If the price falls below both, it could signal a deeper pullback.
Price Action
The stock opened at 97.73, reached a high of 98.82, and closed at 98.12. The price movement is relatively tight, with the stock bouncing within a narrow range. Over the past few months, there was a strong run-up followed by some choppiness. The recent action suggests the stock is testing key support and resistance levels, looking for direction.
Volume Trends
Trading volume came in at 1.06 million shares, which is in line with recent averages. There hasn’t been any major spike in volume, which means there’s no strong conviction from either buyers or sellers at this level. This could indicate a period of consolidation before a bigger move occurs.
Relative Strength Index (RSI)
The RSI is in a neutral range, suggesting the stock is neither overbought nor oversold. This aligns with the recent sideways movement, reinforcing the idea that traders are waiting for a clearer signal before making strong bets in either direction.
Analyst Ratings
Over the past few months, C.H. Robinson Worldwide (CHRW) has seen a mix of analyst upgrades and downgrades, reflecting varied perspectives on the company’s performance and future prospects.
Upgrades:
- Stifel Nicolaus On January 31, 2025, Stifel Nicolaus upgraded CHRW from “hold” to “buy,” setting a price target of $113. The analyst cited improved earnings performance and expectations of sustained growth in the logistics sector as reasons for the upgrade.
- Raymond James On January 10, 2025, Raymond James elevated CHRW to “outperform” from “market perform,” assigning a price target of $123. The firm highlighted CHRW’s strategic initiatives and operational efficiencies as factors enhancing its competitive position.
- Wells Fargo On December 9, 2024, Wells Fargo shifted its rating from “equal weight” to “overweight,” increasing the price target from $118 to $130. This change was attributed to CHRW’s resilience in navigating supply chain challenges and capitalizing on market opportunities.
Downgrades:
- Barclays On November 13, 2024, Barclays maintained a “sell” rating but raised the price target from $85 to $95. The firm expressed concerns about potential margin pressures and competitive dynamics affecting CHRW’s profitability.
- Susquehanna On November 1, 2024, Susquehanna reiterated a “neutral” stance, adjusting the price target from $120 to $115. The adjustment reflected caution regarding macroeconomic headwinds and their potential impact on freight volumes.
- Morgan Stanley On January 6, 2025, Morgan Stanley maintained an “underweight” rating, adjusting the price target from $70 to $71. The firm expressed concerns about potential challenges in the logistics sector that could impact CHRW’s performance.
As of February 28, 2025, the consensus among 17 analysts is a “moderate buy” rating for CHRW, with an average 12-month price target of $116.94. This suggests an anticipated upside of approximately 15% from the current share price of $101.62. The price targets range from a high of $133 to a low of $71, indicating varied expectations among analysts.
These mixed ratings underscore the dynamic nature of the logistics industry and the importance of monitoring CHRW’s strategic responses to evolving market conditions.
Earnings Report Summary
C.H. Robinson wrapped up the fourth quarter of 2024 on a strong note, delivering solid improvements in profitability. Gross profits climbed 10.4% to $672.9 million, thanks to better margins, improved productivity, and a focus on higher-quality business. The company’s strategic efforts to fine-tune operations seem to be paying off, as operating income jumped an impressive 71.1% to $183.8 million.
Earnings per share saw a massive boost, with diluted EPS skyrocketing 369.2% to $1.22. Adjusted EPS also had a strong showing, rising 142% to $1.21. This kind of growth highlights just how well the company has managed to navigate market conditions and optimize its operations.
One of the biggest takeaways from the quarter was the strong cash flow. Operating cash flow surged by $220.6 million to $267.9 million, showing that C.H. Robinson is generating solid cash from its core business.
Looking at the full year, gross profits were up 5.8% to $2.7 billion, and operating income climbed 30% to $669.1 million. The company’s operating margin improved as well, reaching 24.2%, with adjusted margins hitting 27.5% when factoring out restructuring costs.
Annual earnings per share followed the same upward trend, with diluted EPS rising 41.9% to $3.86 and adjusted EPS up 36.7% to $4.51. That kind of earnings growth reflects the company’s ability to drive profitability despite industry challenges.
The one area that saw a decline was cash flow for the full year. Operating cash flow dropped by $222.9 million, finishing at $509.1 million. This was largely due to higher working capital needs related to ocean shipping costs, which put some pressure on cash reserves.
Overall, the latest earnings report paints a picture of a company that is strengthening its profitability, refining its operations, and staying resilient in a shifting market. While there are still some headwinds, the strong earnings growth and improved margins suggest that C.H. Robinson is making meaningful progress in driving long-term value.
Financial Health and Stability
CHRW operates in a low-margin industry, so profitability metrics are important to consider.
- Net profit margin stands at 2.63%
- Operating margin is slightly higher at 4.71%
- Return on equity (ROE) is a strong 29.66%
While the company is efficient in generating returns for shareholders, the high debt-to-equity ratio of 101.11% suggests a reliance on borrowed capital. This is not necessarily a red flag, but it does mean rising interest rates or economic slowdowns could have a greater impact.
The company holds $145 million in cash, which isn’t a massive cushion, but its strong cash flow generation helps maintain stability. Investors should keep an eye on debt management to ensure dividend payments remain secure.
Valuation and Stock Performance
CHRW is currently trading with a price-to-earnings (P/E) ratio of 25.42, which is slightly higher than its historical average. Its forward P/E of 20.08 suggests analysts expect earnings to improve in the coming years, but growth is expected to be moderate.
Key valuation metrics include:
- Price-to-sales ratio at 0.67, which is reasonable for the industry
- Enterprise value-to-EBITDA ratio of 17.28, indicating a fair valuation
- Price-to-book ratio of 6.76, reflecting a premium on its book value
The stock has experienced significant price swings over the past year, with a 52-week high of $114.82 and a low of $65.00. At its current price of $98.12, it is trading near its 200-day moving average, which suggests the market views it as fairly valued for now.
With a beta of 0.83, CHRW tends to be less volatile than the broader market. This is a positive sign for dividend investors looking for stability rather than large price fluctuations. However, the recent 50-day moving average of $101.97 indicates some short-term weakness.
Risks and Considerations
Even solid dividend-paying stocks come with risks, and CHRW is no exception. Investors should be aware of potential challenges that could impact dividend stability and stock performance.
- The freight and logistics industry is cyclical, meaning earnings can fluctuate based on global trade and economic conditions. A slowdown in shipping demand could put pressure on profitability.
- The company carries a significant amount of debt. While cash flow is strong, rising interest rates or economic headwinds could make it more expensive to service this debt.
- Competition in logistics is intense. Large players like UPS and FedEx, along with tech-driven digital freight startups, are constantly pushing for efficiency and market share.
- Dividend growth may be slower in the coming years, given the company’s current payout ratio and financial priorities.
Final Thoughts
For dividend investors, C.H. Robinson Worldwide presents an interesting balance of stability and income. The company has a reliable dividend history and generates strong cash flow, making it a steady choice for those looking to collect passive income.
The stock is trading at a reasonable valuation, but its debt levels and industry cyclicality are factors to consider. CHRW may not offer rapid dividend growth, but for investors seeking steady, moderate payouts, it remains a viable option.
Ultimately, the company’s ability to navigate industry challenges and maintain its strong cash flow will determine how attractive it remains for long-term dividend investors.
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