How Should Investors Approach Wabtec Post Latest Dividend Hike?

Early this month, Wabtec Corporation (WAB) stated that its board of directors had announced an increase in its quarterly dividend payout, reflectingthe company’s commitment to boosting shareholder value, apart from underlining confidence in its business.

Dividend-paying stocks provide a solid income stream and have fewer chances of experiencing wild price swings. Dividend stocks are safe bets for creating wealth, as the payouts generally act as a hedge against economic uncertainty, like the current scenario. 

Given this backdrop, the question that naturally arises is: Should investors buy, hold, or sell WAB stock now? A more in-depth analysis is needed to make that determination. Before diving into WAB’s investment prospects, let’s take a glance at its financial numbers.

Wabtec’s Recent Dividend Increase of 25%

On Feb. 6, 2026, Wabtec’s board of directors approved a dividend hike of 25%, thereby raising its quarterly cash dividend to 31 cents per share ($1.24 annualized) from 25 cents ($1.00 annualized). The raised dividend will be paid out on March 2, 2026, to shareholders of record at the close of business on Feb. 17. The move reflects WAB’s intention to utilize free cash to enhance its shareholders’ returns.

Wabtec Dividend Yield (TTM)

Wabtec dividend-yield-ttm | Wabtec Quote

Notably, Wabtec has been consistently making efforts to reward its shareholders through dividends and share buybacks, which are encouraging. Continuing the shareholder-friendly approach, WAB rewarded its shareholders in 2022 through a combination of cash dividends ($111 million) and share repurchases ($473 million). During 2023, WAB repurchased shares worth $409 million and paid $123 million in cash dividends. During 2024, WAB repurchased shares worth $1.09 billion and paid $140 million in cash dividends. During 2025, WAB repurchased shares worth $223 million and paid $173 million in the form of dividend payments.

Wabtec is not the only player from the Zacks Transportation sector that has rewarded its shareholders with dividend payouts or share buyback programs in 2026.

To name a few, on Jan. 26, 2026, Schneider National, Inc.’s (SNDR) board of directors declared a dividend hike of 5%, raising its quarterly cash dividend to 10 cents per share from 9.5 cents. The raised dividend (payable to shareholders of record as of March 13, 2026) is expected to be paid on April 8, 2026. As of Dec. 31, 2025, SNDR had rewarded its shareholders with $67 million in the form of dividend payments.Additionally, SNDR's board of directors authorized a new $150 million share repurchase program, which replaces the existing program.

WAB Stock’s Price Performance

Shares of Wabtec have gained 36% in the past year, outperforming the Zacks  Transportation - Equipment and Leasing industry’s 22.6% surge, as well as that of other industry players, The Greenbrier Companies, Inc. (GBX) and Ryder Corporation R, within the same time frame.

WAB Stock’s One-Year Price Comparison

Factors Working in Favor of WAB Stock

WAB’s focus on new technologies improves the safety, cost and reliability of railroads, supporting the modernization of global rail fleets. Of late, WAB has introduced a number of significant new products, including PTC equipment that includes onboard digital data and global positioning communication protocols.

To combat inflationary pressures, WAB is focusing on cost-cutting measures and making efforts to improve productivity and efficiency. WAB also aims to boost profitability by exiting various low-margin product offerings through portfolio optimization. Apart from cost control initiatives, WAB aims to provide real-time visibility and optimization to help busy railroads stay on schedule and recover from disruptions faster, which should help acquire and retain customers.

Its strong free cash flow-generating ability helps in making consistent dividend payments and share buybacks. Such shareholder-friendly initiatives should boost investor confidence and positively impact the bottom line.

What Do Earnings Estimates Say for WAB?

The positive sentiment surrounding WAB stock is evident from the fact that the Zacks Consensus Estimate for the first quarter of 2026 and second-quarter 2026 earnings has been revised upward in the past 60 days. The consensus mark for 2026 and 2027 earnings has also been projected northward in the past 60 days.

The favorable estimate revisions indicate brokers’ confidence in the stock.

Unattractive Valuation Picture for WAB Stock

Wabtec looks expensive from a valuation standpoint. Considering the forward 12-month price-to-sales ratio (P/S-F12M), WAB is trading at a premium compared to the industry.

The stock has a forward 12-month P/S-F12M of 3.66X compared with 2.33X for the industry over the past five years. The company’s forward 12-month P/S-F12M ratio is also above the median level of 2.13X over the past five years. These factors indicate that the stock’s valuation is unattractive. WAB has a Value Score of D.

WAB P/S Ratio (Forward 12 Months) Vs. Industry

Time to Buy Wabtec Stock

Despite being unattractively valued, Wabtec stock looks beneficial due to the positive developments, like focus on new technologies to improve safety and reliability, together with its restructuring actions and cost-cutting initiatives. Its strong free cash flow generating ability helps in consistently rewarding its shareholders through dividend payouts and share buybacks. We believe such shareholder-friendly initiatives should boost investor confidence and positively impact the company’s bottom line.

We, therefore, suggest investors to add Wabtec stock to their portfolios for healthy returns. The company’s Zacks Rank #2 (Buy) further supports our thesis. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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