Why Shares of American Railcar Industries, Inc. Popped Today

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of American Railcar Industries  (NASDAQ: ARII  ) jumped 14% today after the company reported earnings.

So what: Revenue fell 5.1% from a year ago to $197.2 million, partially due to a shift from direct sales of railcar shipments to leases. Net income was flat at $24.4 million, or $1.14 per share, but came in $0.14 ahead of estimates.  

Now what: What may have gotten investors even more excited than beaten estimates was the 60% increase in American Railcar's dividend to $0.40 per share this quarter. The move to leases instead of sales also appears to be going well, nearly doubling the fleet to 4,450 railcars in 2013. This isn't going to be a high-growth company, but at 14 times earnings and a 2.8% dividend yield, it's a solid pick for income investors.

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