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Ever thought about trying to profit from your daily commute? According to data from the TUC more than 3 million people spend two or more hours commuting to and from work every day. If we’re going to be stuck on a train, bus or car for chunks of lives, then now seems a good time to find ways of getting some compensation.
There are numerous companies listed on the UK stock market who provide goods and services to support the transport networks. They are profiting from your commute. By owning their shares, you become part owner of the business and therefore benefit from their success.
As an investor, you stand a chance of getting a financial reward in the form of cash dividends and hopefully seeing an increase in the value of your investment over time. But you should never forget that dividends aren’t guaranteed to be paid by any company and there is always the risk that the value of the shares can fall.
Most of the UK’s train franchise operators are listed on the London Stock Exchange. The best performer has been Stagecoach over the past 10 years. You would have made an average 8.5% return on your investment every year over that decade, calculated as a combination of the increase in the share price and the dividends paid to you. That’s more than twice the return from the FTSE 100 which only has a 4.09% annual ‘total return’ over the same period, according to Morningstar data.
Stagecoach runs the South West Trains, East Midland Trains and Supertram franchises, and also has a 49% stake in the Virgin Trains business that transports people between many major UK locations such as London, Manchester and Edinburgh.
Interserve may not be a household name, yet the £640 million business provides many essential support services to the country’s transport industry. For example, it clears rubbish and overgrowing trees from railway tracks; it cleans nearly 2,500 London underground tube carriages every night; and checks hundreds of thousands of tickets.
A member of the prestige FTSE 250 index, Interserve has delivered 4.87% average annual returns to shareholders over the past 10 years, thereby beating the blue chip FTSE 100 index’s 4.09%.
Although somewhat smaller in size than Stagecoach and Interserve, Leeds-based Tracsis stands well above its larger transport peers in terms of investment performance. The £135 million business has only been on the stock market since 2008, so you can’t compare total return data for the same 10 year period. However, on a five-year basis it has delivered an astonishing 60.29% average annual return to investors, according to Morningstar.
Tracsis specialises in capturing data to help solve problems in the transport industry. This might be ensuring there are enough drivers and train crew or railway carriage stock. It also has systems to predict and prevent faults with track points, so as to ensure trains run on time.
Data provided by Morningstar
This article is provided by Shares Magazine. Shares publishes information and ideas which are of interest to investors. It does not provide advice in relation to investments or any other financial matters and does not guarantee the accuracy or completeness of the information in this article.
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