Norfolk Southern Dividend Stock Anlaysis

NSC

Norfolk Southern Corp (NSC) is the fifth largest publicly traded railroad company in North America. The company commands an impressive 20,000 miles of rail network serving 22 states and 40+ ports. The following system map image demonstrates the scale and reach of Norfolk Southern. Norfolk Southern operates and services the east coast of the US and directly competes with CSX Corp (CSX).

Railroads are the pulse of the economy. While crude shipments are on their way to a recovery thanks to the rise in oil prices, coal remains in a secular downtrend. NSC sees continued pressure as coal made 17% of total revenue opportunity in 2015. NSC expects further weakness as coal volumes continue to drop. This article provides a detailed stock analysis for Norfolk Southern Corp.

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4 thoughts on “Norfolk Southern Dividend Stock Anlaysis

  1. R2R,

    I wish I would have kept my UNP position from earlier this year. It’s hard to believe how cheap they were. NSC seems to trade at more of a discount to UNP for the year. I guess it’s because they are the smaller dog. Both are definitely worth owning though.

    MDP

    • Hi MDP,
      UNP is a much stronger company imo — so, I think it makes sense that the valuation is slight better due to the risk-reward profile for NSC. Between those two you can pretty much all of the continental US. Good companies to own, for sure.

      cheers
      R2R

  2. Thanks for the link to your analysis, I will take a closer look. At a glance the payout ratio looks good on an EPS basis but a bit tight based on free cash flow. I also like how they’ve consistently reduced share count. Thanks again for the potential stock pick!

    • NSC is an interesting company — there are a few issues that need to be worked out, but it remains an interesting choice if you want exposure to the eastern US market. Eventually we will see some more consolidation, but that might be a few years off. But meanwhile, the RRs provide a good exposure to the transportation market and are good long term investments.

      Thanks for stopping by
      R2R

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