Take stock of commuter woes

Fed up with being squashed on the train or bus? Sick of being stuck in the rush hour traffic jam?

Whether you live in Leeds or London, Birmingham or Bristol, commuters have no choice but to suffer the journey to and from work every day. But there is a way to get something back from this travel misery, and that’s to consider buying shares in the same companies who profit from your commute.

There’s a whole host of transport-related shares on the London Stock Exchange. From planes to trains and automobiles - they are all represented on the stock market by car manufacturers and dealers, train makers and even aerospace engineers.

Over the last decade the best performer stockwise has been Stagecoach. If you’d chosen to invest, your investment would have made an average 8.5% return each year over 10 years, calculated from dividends paid plus the increase in the share price. According to Morningstar data, that’s over twice the return from the FTSE 100, which had a 4.09% annual total return over the same period.

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Stagecoach operates the South West Trains franchise, which runs commuters in and out of London Waterloo and also has a 49% stake in the Virgin Trains business that takes people from Euston to the Midlands and beyond.

As an investor, you stand a chance of getting a financial reward in the form of cash dividends and 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 shares can fall.

Interserve may not be a household name, yet the £640 million business provides many essential support services to London’s transport industry. For example, its staff clear rubbish and overgrowing trees from railway tracks, clean nearly 2,500 London Underground Tube carriages every night and check 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, in order to ensure trains run on time.

Click here to find out more how to open a Stocks and Shares ISA

Data provided by Morningstar

Please note the value of investments, and any income from them can go down as well as up and you may not get back your original investment. AJ Bell Youinvest do not offer advice about the suitability of their products or any investments held within them. Should you require financial advice you should consult a suitably qualified financial adviser. Tax rules can change in the future and the tax treatment depends on your personal circumstances. Past performance is not a guide to future performance and some investments need to be held for the long term.

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