Updated 5/28/25
Landstar System (LSTR) operates with a focused, asset-light model that connects shippers to a broad network of independent agents and third-party carriers. Headquartered in Jacksonville, Florida, the company has built a reputation for steady execution, strong free cash flow, and disciplined capital allocation. Its freight volumes recently bucked seasonal trends with a rare Q1 uptick over the prior quarter, hinting at potential market share gains despite ongoing pressure in the broader transportation sector.
Backed by a strong balance sheet and a shareholder-friendly approach, Landstar has consistently returned capital through dividends and buybacks. The stock trades at a moderate valuation after a 20% pullback over the past year, presenting a potential opportunity for investors focused on reliable cash flow and measured growth. The company recently increased its dividend by 11%, reinforcing management’s confidence in long-term fundamentals.
Recent Events
Over the past year, the freight market has been anything but smooth. Landstar’s total revenue over the trailing twelve months reached $4.82 billion, but that’s down slightly year-over-year. The bigger story is on the earnings side—quarterly profits have dropped over 36%, a clear sign that margin pressure is real right now.
Still, Landstar isn’t showing signs of stress. It ended the most recent quarter with $473 million in cash on the books and just $154 million in total debt. That gives it a financial cushion that many in this space would envy.
The stock, however, has taken a hit. Over the last 52 weeks, LSTR is down more than 21%, while the broader market moved in the opposite direction. The share price currently hovers around $137.88. For dividend investors, though, that weakness might offer a window—especially for those reinvesting dividends or dollar-cost averaging over time.
Key Dividend Metrics
📈 Forward Dividend Yield: 1.15%
💵 Annual Dividend Rate: $1.60 per share
🧮 Payout Ratio: 27.98%
📅 Next Dividend Date: June 24, 2025
⏰ Ex-Dividend Date: June 5, 2025
📊 5-Year Average Yield: 0.66%
🔁 Dividend Growth Streak: 12 years
Dividend Overview
No, Landstar isn’t going to attract attention with a high yield. Its forward dividend yield is 1.15%, which is on the low side compared to the market. But here’s where it gets more interesting: that dividend is backed by strong fundamentals and a long track record of disciplined capital allocation.
The company’s payout ratio sits comfortably under 28%. That’s not just sustainable—it’s conservative, especially in a sector where many peers stretch themselves to maintain their dividend. Landstar doesn’t play that game. Instead, it takes a measured approach that prioritizes flexibility and longevity.
Landstar pays dividends quarterly, and its next distribution lands on June 24. Investors looking to capture that payment will need to be holding shares by June 5. While the current yield might not wow income hunters, the dependability of this stream is worth recognizing.
Over the last decade, the company has made the dividend a steady part of its financial playbook. There’s no fanfare or flashy announcements—just quiet, consistent increases that have added up over time.
Dividend Growth and Safety
While the dividend yield may not jump off the page, what’s impressive is how steadily it’s been rising. Back in 2015, the annual payout was just $0.60. This year, it’s up to $1.60. That’s solid growth by any measure, averaging close to 10% annually.
Landstar doesn’t just hike the dividend out of habit. These increases are backed by real cash flow. Over the past twelve months, the company generated $248 million in operating cash flow and retained nearly $200 million after capital expenses. That’s a strong base to support not just today’s dividend, but future hikes as well.
The balance sheet also tells a reassuring story. With a debt-to-equity ratio around 16% and a current ratio of 2.03, the company has more than enough liquidity to weather economic fluctuations. Its operating model allows for quick adaptation to freight cycles, and that financial strength gives it the ability to continue rewarding shareholders without overextending.
Another important aspect here is how management thinks about capital allocation. They’re not chasing trends or trying to appease short-term investors. Instead, they’re returning capital through dividends and share repurchases in a way that matches the business cycle. When cash flows are strong, they ramp up. When the environment tightens, they pull back. That level of flexibility adds a layer of safety to the dividend.
What Landstar offers isn’t a flashy yield or a get-rich-quick story. It’s a lesson in financial discipline and long-term execution. For dividend investors who prioritize quality over quantity, that kind of reliability goes a long way.
Cash Flow Statement
Landstar System generated $248 million in operating cash flow over the trailing twelve months (TTM), a clear sign that the core business is still producing steady cash even amid a softer freight environment. This cash generation supports its ability to fund dividends, manage operations, and repurchase shares without leaning on debt. The company also reported $198 million in levered free cash flow, reflecting efficient capital spending and strong cost control.
With nearly half a billion dollars in cash on hand and only $154 million in total debt, Landstar has plenty of breathing room. The asset-light model shows its strength here—by avoiding heavy capital investments, the company maintains flexibility regardless of market conditions. That gives management options, whether it’s returning capital to shareholders or investing when the freight cycle turns more favorable.
Analyst Ratings
Landstar System has recently seen a shift in sentiment among analysts, with one notable downgrade moving the stock from a “hold” to a “sell” rating. This change came on the heels of underwhelming earnings results, which fell short of forecasts and raised concerns about the company’s near-term prospects in a still-sluggish freight environment. Analysts pointed to margin pressure and a lack of volume recovery as key drivers behind the downgrade.
✂️ Evercore ISI trimmed its price target slightly from $137 to $136 while maintaining an “in-line” rating, suggesting they see the stock as fairly valued under current conditions. Meanwhile, 🧭 Stifel Nicolaus adjusted their outlook as well, lowering their target from $147 to $140. Their view was shaped by continued weakness in freight volumes and uncertainty around demand trends heading into the second half of the year.
📉 Despite these cautious moves, the broader analyst consensus still rates the stock as a “hold.” The average 12-month price target across firms is currently sitting at $151.91. That leaves a bit of upside from current levels, signaling that while expectations are muted, there’s no broad rush for the exits. Analysts seem to agree: Landstar isn’t without its challenges, but it’s not broken either.
Earnings Report Summary
Mixed Results in a Tough Quarter
Landstar System’s first quarter of 2025 brought some headwinds, but also a few encouraging signs beneath the surface. Revenue landed at $1.153 billion, just shy of where it was this time last year. Earnings per share, though, saw a more noticeable drop—coming in at $0.85 compared to $1.32 the year before. A good portion of that decline was tied to a $4.8 million charge the company took related to a fraud issue in its international freight forwarding segment. That alone shaved about ten cents off earnings per share.
But not everything was gloomy. One surprise this quarter was the number of truckloads hauled, which actually ticked up from the previous quarter. That’s not something you see often in Q1 and could point to Landstar quietly gaining market share. Heavy haul services also had a solid showing, with revenue climbing 6% year-over-year. That growth came from both a rise in volume and better pricing per load.
Managing Through Pressure Points
Operating income came in lower than last year at $39.4 million, down from $59.9 million. A big part of that drop came from higher insurance and claims costs, which spiked more than usual. Claims represented over 9% of BCO revenue, nearly double the historical average. Cargo theft and some unfavorable developments on older claims played a role in that number.
Even with these pressures, Landstar continues to stand on solid financial ground. The company has around $473 million in cash and short-term investments, giving it plenty of flexibility. They’ve also been returning capital to shareholders at a steady clip. In the quarter, they repurchased 386,000 shares for roughly $61 million and paid out more than $83 million in dividends.
What’s more, the board approved an 11% boost to the quarterly dividend, now up to $0.40 per share. That decision reflects confidence in the business, even as conditions remain challenging.
Looking Ahead with Cautious Optimism
Landstar leadership didn’t sugarcoat the current environment. They acknowledged the freight market is still facing a lot of uncertainty, with demand trends not yet turning the corner. But they’re staying focused on what they can control—prioritizing safety, maintaining strong service standards, and running a lean, flexible operation.
They’re not calling for a near-term recovery just yet, but they seem confident that Landstar is well-positioned to navigate whatever the rest of the year brings. And if the early strength in truckload volumes is any clue, they may already be starting to turn a corner.
Management Team
Landstar’s leadership team has a long-standing reputation for running a lean, focused, and shareholder-oriented operation. Jim Gattoni, the President and CEO since 2014, continues to lead with a steady hand. Throughout his tenure, the company has stayed committed to its asset-light model and has consistently emphasized efficient operations, strong free cash flow, and cautious financial stewardship.
Gattoni and the rest of the executive leadership don’t chase headlines. Their approach is measured and intentional, preferring consistent execution over flashy initiatives. The team places a strong emphasis on technology upgrades and operational enhancements to support agents and capacity providers, ensuring the business stays agile in a rapidly evolving logistics landscape.
The rest of the leadership bench mirrors that philosophy. It’s a tight-knit, cost-conscious team where leaders often take on broad roles, contributing to the company’s low overhead and high accountability. They understand that predictable execution and long-term planning often beat short-term noise in the logistics world.
Valuation and Stock Performance
Landstar shares have had a challenging year, falling over 20% as broader freight markets softened. While that underperformance stings in the short run, it may not reflect the company’s long-term strength or its solid balance sheet. The current share price hovers around valuation multiples that, while not screaming cheap, are more in line with historical norms.
The forward P/E ratio is around 27, which might look elevated, but it comes with context. Landstar requires little capital investment to grow and consistently delivers free cash flow. That makes it different from more asset-heavy logistics peers that carry more risk during downturns.
Price-to-sales sits near 1, and price-to-book around 5—levels that suggest the market is starting to reassess the earlier premium placed on earnings. Enterprise value to EBITDA is close to 17, another number that may look rich until you consider the capital-light structure, strong returns, and financial cushion Landstar enjoys.
The stock’s movement has diverged from the company’s operating stability. For investors who are focused on long-term quality and steady capital returns, that could represent an entry point rather than a warning sign.
Risks and Considerations
Every company faces headwinds, and Landstar is no exception. Freight markets remain cyclical and are tied closely to broader economic trends. A cooling industrial sector, inflationary pressures on inputs, or continued disruptions to supply chains could all impact short-term performance.
One recent concern involved a charge related to fraudulent activity in the international freight forwarding business. While the financial impact was manageable, it served as a reminder that operational risk exists even in disciplined businesses.
Insurance and claims expenses have also crept higher, with cargo theft and legacy claim adjustments pushing these costs above historical averages. If these issues become recurring, they could impact the bottom line more meaningfully.
Landstar also relies on its network of agents and third-party capacity. That model creates flexibility but introduces dependencies. If agent performance slips or external providers face challenges, the company may feel the ripple effects. It’s a strength in terms of scalability, but a risk when the broader logistics ecosystem is under pressure.
Lastly, valuation still deserves attention. Even after the recent drop, the stock isn’t cheap by traditional measures. That means expectations are still built into the price, and the company will need to continue delivering strong, consistent results to justify that premium.
Final Thoughts
Landstar may not be a household name, but it’s quietly become a favorite for investors who value financial discipline and reliability. The leadership team is seasoned and avoids unnecessary risks. The balance sheet is clean, dividends are growing, and free cash flow remains strong even in a sluggish environment.
This isn’t the kind of stock that gets hyped up or swings wildly based on headlines. It’s a business that sticks to what it knows—coordinating freight with efficiency, keeping overhead low, and returning value to shareholders in a thoughtful, measured way.
For long-term, dividend-focused investors, there’s a lot to like. The stock may not dazzle with yield or growth, but it delivers where it matters: consistency, safety, and smart capital management. In a space that can be volatile, Landstar offers a steady hand and a business model that’s built to endure.