"American Railcar is a pure play on this business, one that gets 20% of its sales from tank cars," said Cramer. "I think American Railcar has the most leverage to this bull market, as well as the most upside, and it also sports a solid 2.8% yield."
"Trinity is the largest and broadest railcar supplier out there, but it also happens to be a diversified multi-industry company with a lot of exposure to other businesses," Cramer explained.
"Trinity makes construction products like cement, they make energy equipment like wind towers, and they also make inland barges. That said, railcars are the biggest part of the equation for Trinity—between making the cars and leasing them out, railcars account for about half of the company's revenues."
"And to drill down further, tank cars make up 20% of Trinity's revenues, about the same proportion as American Railcar."
As mentioned above there are two other major players in the rail car industry.
"I would stay the heck away from FreightCar America," said Cramer. "This company mostly focuses on coal, and as we just heard from CSX and Norfolk Southern, the business of shipping coal is still in tough shape."
"Greenbrier is the diversified railcar name that just rejected a bid from Carl Icahn at $22 a share at the end of last year," said Cramer. "Now the stock is at $18 and change. Maybe they should have said yes. Greenbrier was getting a major lift from the potential Icahn investment, but the company's made a series of missteps, and it has a ton of exposure to intermodal railcars, which is one of the weaker areas. Greenbrier's said they're still open to conversations with Icahn, but I say this one's not worth the risk."
The Bottom Line: "If you're looking to profit from this bull market, American Railcar is the pure play, but Trinity is best of breed, even as only half of its revenues come from making or leasing railcars. This business is so strong, I think both are buys," said Cramer.