After last week's roller-coaster ride, investors were hoping to see a bounce, and that's exactly what they got in the form of a 400-point rise in the Dow Jones Industrials on Monday. Major benchmarks were all up around 1.5% to 1.7% in the wake of a relatively uneventful weekend and the release of information about the Trump administration's infrastructure proposal. Some stocks did even better, and CSX (CSX 0.47%), Teva Pharmaceutical Industries (TEVA 1.56%), and Marathon Oil (MRO +0.00%) were among some of the top high-profile performers on the day. Here's why they did so well.
CSX steams higher on dividend, buyback boosts
Shares of CSX rose almost 4.5% after the railroad company announced increases to its dividend and stock repurchase program. Shareholders will receive $0.22 per share in dividends on a quarterly basis beginning in March, which works out to about a 1.6% dividend yield based on share prices after the jump. CSX also announced an increase in its share repurchase program to $5 billion, which it intends to complete by the end of the first quarter of 2019. Given that the buyback is about 10% of its current market capitalization, CSX is doing a lot to return capital to shareholders at a time during which investors are still getting over the tragic death of former CEO Hunter Harrison.
Image source: CSX.
Teva gets a bounce
Teva Pharmaceutical Industries stock picked up more than 3.5%, bouncing back from extensive losses last week after the generic-drug maker reported less-than-stellar earnings late last week. The company received a positive view from analysts at Credit Suisse, which upgraded the stock from neutral to outperform and boosted its price target on the stock by 15% to $23 per share. Despite questions about its guidance for the coming year, Teva could reach its restructuring goals more quickly than many anticipate, in Credit Suisse's opinion. If Teva can overcome headwinds from generic competition and execute well in achieving its business goals, then the stock's gains today could be the beginning of a larger trend.
Marathon powers up
Finally, shares of Marathon Oil climbed 5%. The energy company's investors reacted favorably to a slight bounce in the price of crude oil, which had moved sharply lower last week. Marathon is due to announce its earnings later this week, and investors are hopeful that the company will be able to keep overcoming some of the difficulties in maintaining production that have plagued the entire industry lately. If key holdings in the Bakken shale region of North Dakota and the STACK play in Oklahoma keep doing well, then Marathon should be in good shape to keep up its winning ways regardless of whether it reinvests in new growth opportunities or uses profits to improve its balance sheet.
