Is railroad a good investment?
High profitability, a moat, stable businesses, a good return on capital and a focus on rewarding shareholders has pushed railroad stocks to extremely high levels.
With a strong history, railroads are likely to remain a constant presence well into the future. When it comes to investing, boring is often best, and there may be no more mundane a sector than railroads. For nearly 200 years, rail companies have been shipping goods.
Best Value Railroad Stocks | ||
---|---|---|
Price ($) | Market Cap ($B) | |
Trinity Industries Inc. (TRN) | 32.09 | 2.7 |
CSX Corp. (CSX) | 34.89 | 76.5 |
Norfolk Southern Corp. (NSC) | 269.85 | 64.7 |
Union Pacific Corporation - Hold
Valuation metrics show that Union Pacific Corporation may be overvalued. Its Value Score of D indicates it would be a bad pick for value investors. The financial health and growth prospects of UNP, demonstrate its potential to underperform the market.
The US economy is colossal. In fact, it represents more than 20% (1/5th) of the entire global economy.
This was its second 10.3% year-over-year dividend raise in 2021. UNP also increased it during the May quarter from $0.97 to $1.07. As such, its most recent dividend was 21.6% higher than its quarterly payment one year before. UNP is down 3.01% on a year-to-date basis, representing relative outperformance.
Railroads benefit from inflation in terms of their long-term debt at low interest, increased cash flow, betterment accounting, use of rolling stock as a tax shelter by others, and prospects for increased coal traffic.
Burlington Northern Santa Fe, LLC is the parent company of the BNSF Railway (formerly the Burlington Northern and Santa Fe Railway). The company is an indirect, wholly owned subsidiary of Berkshire Hathaway, which is controlled by investor Warren Buffett.
There are currently 1 sell rating, 4 hold ratings and 15 buy ratings for the stock. The consensus among Wall Street research analysts is that investors should "buy" CSX stock.
Cascade Investment, the investment arm of Microsoft founder Bill Gates, announced today its purchase of 13,670 Canadian National Railway shares, which increases Gates' ownership of the company by 0.0003 per cent.
What is the highest CSX stock has ever been?
CSX - 42 Year Stock Price History | CSX
The all-time high CSX stock closing price was 37.80 on March 30, 2022.
- Table of Contents.
- Top Railroad Stock #6: Kansas City Southern (KSU)
- Top Railroad Stock #5: Canadian National Railway (CNI)
- Top Railroad Stock #4: Union Pacific (UNP)
- Top Railroad Stock #3: Norfolk Southern (NSC)
- Top Railroad Stock #2: CSX Corporation (CSX)
Over the past quarter, shares of Union Pacific have risen 8.56%, and are up 23.73% in the last year.
Union Pacific has a rock-solid business model that allows it to generate outperforming growth. The company has a record of high dividend growth and significant buybacks that allow the stock to outperform the S&P 500. Its balance sheet is stable, but the valuation is somewhat lofty.
Union Pacific has received a consensus rating of Buy. The company's average rating score is 2.71, and is based on 13 buy ratings, 7 hold ratings, and no sell ratings.
Matt Frankel: This also a really good recession-resistant play, it's worth mentioning. The railroad industry, it's very good. If we get a real recession, not like the COVID recession that lasted March and April of last year, but an actual deep recession.
BNSF Railway is the leading U.S. class I freight railroad company, generating more than 20.8 billion U.S. dollars in operating revenue in 2020. The railroad focuses on transporting freight commodities such as coal, industrial or agricultural products .
The top 3 best train companies in the world are then rounded out by Canadian National Railway and Central Japan Railway Company when accounting for market cap. Deutsche Bahn is the top railroad company in the world by revenue.
[Updated: Sep 23, 2021] CSX Stock Decline
However, CSX stock has seen a decline of around 12% since then, and it is down 3% in the last five trading days. The recent decline can be attributed to the rising Covid-19 cases, which may hamper the economic recovery and the overall demand for railroad shipping.
“Trying to pack a car – and you can't bring as much on a plane – a train is just so much more welcoming for family travel.” Even before COVID-19 decimated its revenue, Amtrak lost money each year, mostly because of its 15 long-distance routes like the Empire Builder.
What is the best railroad company to work for?
- U.S. Xpress, Inc. 2.7 stars. ...
- CRST International. 2.7 stars. ...
- UPS Freight. 2.7 stars. ...
- ArcBest. 2.7 stars. ...
- NJ TRANSIT. 2.7 stars. ...
- Hub Group. 2.7 stars. ...
- Amtrak. 2.6 stars. ...
- UPS. 2.6 stars.
- Gold. Gold has often been considered a hedge against inflation. ...
- Commodities. ...
- A 60/40 Stock/Bond Portfolio. ...
- Real Estate Investment Trusts (REITs) ...
- The S&P 500. ...
- Real Estate Income. ...
- The Bloomberg Aggregate Bond Index. ...
- Leveraged Loans.
...
Who owns the railroads.
Union Pacific Railroad — Headquartered in Omaha, Nebraska
Founded in 1862, Union Pacific (UP) has been providing train transportation for 156 years. It's the largest railroad in North America, operating 51,683 miles in 23 states.
The importance of railroads hasn't gone unnoticed by some of the world's top investors. Warren Buffett, the billionaire owner of Berkshire Hathaway and one of the most successful investors alive, owns BNSF Railway Company.
The Union Pacific grew to operate in 13 western states, extending from Council Bluffs, Iowa, and Kansas City, Missouri, to Portland, Oregon, and Los Angeles. Since 1969 it has been owned by the Union Pacific Corporation, a holding company.
FORT WORTH, Texas — BNSF will increase capital spending to $3.55 billion in 2022, after a spend of $2.97 billion in 2021, the railroad reported in its fourth-quarter financial summary.
PB vs Industry: CSX is overvalued based on its PB Ratio (5.6x) compared to the US Transportation industry average (1.8x).
Each shareholder of record at the close of business on June 18, 2021, will receive two additional shares of CSX common stock for each share held as of this record date. The new shares will be distributed on June 28, 2021.
CSX pays quarterly dividends on its common stock on or about the 15th of March, June, September and December, when declared by the board of directors to shareholders of record approximately three weeks earlier. CSX offers direct deposit of dividends to shareholders who request it.
Who owns the largest railroad?
According to the statistics portal Statista, Union Pacific of the USA is worth a massive $75.4 billion, making it comfortably the biggest rail company in the world.
A penny left on a track does not typically derail a train. A train speeding along its track is a very heavy object with an immense amount of momentum. The penny is simply too light to do much of anything. It is flattened or knocked out of the way by the train.
Key Takeaways. Amtrak is a state-owned enterprise. This means that Amtrak is a for-profit company, but that the federal government owns all its preferred stock.
CSX shares outstanding for the quarter ending March 31, 2022 were 2.193B, a 4.07% decline year-over-year. CSX 2021 shares outstanding were 2.255B, a 2.17% decline from 2020. CSX 2020 shares outstanding were 2.305B, a 3.76% decline from 2019.
BNSF - About BNSF - Financial Information - Berkshire Hathaway Inc., Merger Stock Conversion.
Prev Close | 298.64 |
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Open | 293.89 |
Day Low/High | 289.03 / 297.00 |
52 Wk Low/High | 64.37 / 397.52 |
Volume | 40.68M |
Companies in the railroad sector include passenger and freight transportation along rail lines. This also includes companies that provide rail services, such as maintenance and switching duties.
This can be attributed to the company's success in cutting down costs despite the inflationary environment. UNP Stock is also up a solid 77% from levels seen in early 2019. Now, much of this growth over the last three years was driven by the company's P/S ratio, which rose from 4.1x in early 2019 to 7.3x currently.
A combination of concerns about demand and an underwhelming earnings report had Union Pacific (NYSE: UNP) shares on the slow track for most of April. The shares traded down 14.2% for the month, according to data provided by S&P Global Market Intelligence, as uncertainty clouded the transportation sector.
Union Pacific has increased its dividend 4 times on a year-over-year basis over the last 5 years for an average annual increase of 13.86%.