Finder makes money from featured partners, but editorial opinions are our own. Advertiser Disclosure

Investing in transportation stocks

Transportation is a diverse industry that tends to perform well in strong economies, but volatility in external sectors can force it to make sharp turns.

Investing in the transportation industry is a great way to diversify your portfolio across several industries including airlines, railroads and trucking. But because it’s tied to several external industries including oil and gas, transportation stocks can be very volatile.

Government regulations can also deliver a major impact. So can world events like the coronavirus, which rattled the transportation industry in 2020.

What are transportation stocks?

Transportation stocks are part of various companies that move people, products and goods all over the world by land, sea or air. They make up a diverse industry containing several different types of companies including:

  • Airlines
  • Air freight companies
  • Trucking firms
  • Railroads
  • Marine shipping companies
  • Logistics companies
  • Service providers that help transportation firms such as airport operators and marine ports

The transportation industry is a big part of everyday life. Transportation companies get you to where you need to go, food to your supermarket and clothes to your local stores.

Why invest in transportation stocks?

In a global economy, people need to move goods, services and talent around. This is where the transportation industry comes in. And because a vast number of companies are involved, transportation stocks can be seen as clear avenues to portfolio diversification.

The transportation industry is part of the wider industrial sector. That’s why its performance is strongly tied to the state of the overall economy. These companies tend to perform well under robust economic conditions.

This performance can be an indicator that businesses are gaining speed and moving goods and services around to meet demand. But the transportation industry can be highly speculative and hard to predict.

Risks of investing in transportation stocks

Because the transportation industry is so vast, transportation stocks can be affected by the performance of several other sectors. For instance, transportation companies rely heavily on fuel to get the job done. That includes everything from diesel to jet fuel.

If fuel prices rise, so can the costs for different transportation companies. That in turn can cut profits as well as stock prices. An active investor may not benefit from transportation stocks in a difficult economy.

Moreover, trade disputes between countries can severely affect the movement of goods and people from one place to another – along with the companies responsible for making this movement happen. Government regulations can have the same effect.

Government regulations fueled by COVID-19 changed the transportation industry in 2020. Cities around the globe limited transportation services, placed travel restrictions and implemented social distancing mandates. This severely affected the movement of people, and companies like airlines suffered.

A study published on Statista says, “For the week starting November 9, 2020, the number of scheduled flights worldwide was down by 46.5 percent compared to the week of November 11, 2019.”

With uncertainty surrounding the state of COVID-19 restrictions as well as medical advances, the pandemic’s future impact on the transportation industry remains uncertain. A report by Deloitte even went as far as to say, “Commuting and traveling patterns may not recover to their pre–COVID-19 state once lockdowns are lifted.”

But remember, the transportation industry is a large one with several major players. This is why it’s important to carefully analyze transportation companies as well as their plans for future growth, with a keen eye toward how they expect to take on all challenges including the COVID-19 pandemic.

Transportation stocks

With an industry as widespread as transportation, there are many stocks to choose from. Here is a brief list of your investment options. Select a company to learn more about what they do and how their stock performs, including market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield. While this list includes a selection of the most well-known and popular stocks, it doesn't include every stock available.

What ETFs track the transportation category?

You don’t need to limit your investments in transportation to stocks. You can also buy shares of exchange-traded funds, or ETFs, which invest in diversified baskets of transportation of stocks. Here are some examples:

  • S&P Transportation ETF (XTN)
  • iShares Transportation Average ETF (IYT)
  • First Trust Nasdaq Transportation ETF (FTXR)
  • Direxion Daily Transportation Bull 3X Shares (TPOR)
  • SPDR S&P Kensho Smart Mobility ETF (HAIL)

Compare trading platforms

Whether you’re investing in transportation stocks or ETFs, you’ll need a brokerage account. Because key differences such as fees can affect your returns, you should carefully review your options.

1 - 7 of 7
Name Product Asset types Stock trade fee Minimum deposit Signup bonus
SoFi Invest
Stocks, ETFs, Cryptocurrency
$10 - $100
when you open an account and place a first crypto trade of $50 - $5,000+
A free way to invest in most equities.
Stocks, ETFs, Cryptocurrency
8%-12% of your deposit
when you sign up and deposit at least $50. T&Cs apply.
Trade stocks in the app or online with $0 commissions. Not available in NY, NV, MN, TN, and HI.
Stocks, ETFs, Cryptocurrency
Receive a free stock slice worth between $3–$300
when you sign up for an account and deposit at least $20.
Commission-free trading in stocks and ETFs with a social networking twist.
Stocks, Options, ETFs, Cryptocurrency
$200 in US stocks
when you open and fund an account with min. $2,000 for 3+ mos.
Trade stocks, options, ETFs and futures on mobile or desktop with this advanced platform.
JPMorgan Self-Directed Investing
Stocks, Bonds, Options, Mutual funds, ETFs
$125 - $625
when you open and fund an account with $25,000 - $250,000+
Stocks, Options, ETFs, Cryptocurrency
Get a free stock
when you successfully sign up and link your bank account.
Make unlimited commission-free trades, plus earn 3% interest on uninvested cash in your account with Robinhood Gold.
Stocks, Options, ETFs
Customize your trade platform or build your own Deep tools, charts and screens Analyzers to help you study before you trade

Compare up to 4 providers

*Signup bonus information updated weekly.

Disclaimer: The value of any investment can go up or down depending on news, trends and market conditions. We are not investment advisers, so do your own due diligence to understand the risks before you invest.

Bottom line

Investing in transportation stocks can be a lucrative way to diversify your portfolio. But strains in the overall economy can derail the transportation industry.

Do your due diligence as an investor when considering transportation stocks, especially in the midst of COVID-19. Also compare your brokerage options before you begin trading stocks.

Frequently asked questions

Are pipeline stocks part of transportation stocks?
Technically, no. Even though pipelines transport resources like natural gas and crude oil, pipeline stocks are energy stocks.

Are there transportation stock mutual funds?
Yes. Examples include the Fidelity Select Transportation Portfolio (FSRFX) and the Rydex Transportation Fund (RYTSX).

More guides on Finder

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked provides guides and information on a range of products and services. Because our content is not financial advice, we suggest talking with a professional before you make any decision.

By submitting your comment or question, you agree to our Privacy and Cookies Policy and Terms of Use.

Questions and responses on are not provided, paid for or otherwise endorsed by any bank or brand. These banks and brands are not responsible for ensuring that comments are answered or accurate.
Go to site