Railroad Stocks Chugging Higher
Edgar is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
The major railroads are all making moves.
CSX Corp. (NYSE: CSX), a $24.16 billion company, operates a major US rail network transporting bulk commodities, industrial products, and intermodal containers over its network of approximately 21,000 route miles. The company yields 2.11% and has a trailing 12 month EPS of $1.67 and a P/E ratio of 13.6.
Following a 10% increase in 2011, analysts forecast that company's revenues will increase another 5.3% in 2012. The fuel surcharges will stay relatively flat and the increase in car loadings will be driven by gains in intermodal containers and metal related shipments, as well as strength in export coal and auto shipments.
CSX should greatly benefit from the economic recovery given its role in transporting many of the basic materials required in the manufacturing and construction sectors. The stock has gained 2.57% or $0.58 trading at $23.13 with a moderate volume of 2.5 million shares.
Norfolk Southern Corp. (NYSE: NSC) has a slightly lower market cap of $24.07 billion and a dividend yield of 2.58%. It's primarily engaged in the rail transportation of raw materials, intermediate products, and finished goods, primarily in the 20,000 route miles serving 22 Eastern states. It also provides logistics services and offers intermodal network on the East Coast.
The company has a trailing 12 month earnings per share of $5.45 and a P/E ratio of 13.6. Per S&P Equity Analyst Kevin Kirkeby, revenues will increase 5.3% this year with volumes increasing 2.7% with price and mix contributing 2.5% and fuel surcharges remaining relatively unchanged. NSC should continue to take freight away from trucking companies along the Heartland and Crescent Corridors. The company is expected to benefit immensely from growth in export coal shipments. The stock has gained 2.2% or $1.58 with a moderate volume settling near $73.31.
And we can't leave out Union Pacific Corp. (NYSE: UNP), a $56.4 billion giant that provides freight transportation of agricultural products, automotive, chemicals, energy, and industrial products in its 31,953 route miles, linking Pacific Coast and Gulf Coast ports with the Midwest and Eastern United States gateways, as well as providing several corridors to key Mexican gateways.
The company pays a dividend yield of 2.09% and has a trailing 12 month EPS of $6.72 with a 12 month P/E ratio of 17.1. Following a 15% increase last year, revenues are expected to grow 8.4% in 2000 faults. This takes into account the 3.2% projected growth in the volume as did the 5.3% improvement in the yield. The company will continue to benefit from the re-pricing of its older contracts with largely unchanged fuel surcharges from last year's levels. The stock has gained 2% or $2.35, currently trading near $116.66 with a moderate volume.
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