CSX vs Norfolk Southern

CSX Corporation and Norfolk Southern Corporation are two of the major players in the railroad industry, with both companies operating extensive networks across the United States. Investors have long been drawn to these stocks due to their stable cash flows, strong track record of growth, and competitive advantage in the transportation sector. However, there are key differences between the two companies in terms of their business models, geographical footprints, and growth strategies, which can impact their respective stock performances.

CSX or Norfolk Southern?

When comparing CSX and Norfolk Southern, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between CSX and Norfolk Southern.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. CSX has a dividend yield of 1.33%, while Norfolk Southern has a dividend yield of 2.13%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. CSX reports a 5-year dividend growth of -12.94% year and a payout ratio of 25.14%. On the other hand, Norfolk Southern reports a 5-year dividend growth of 12.18% year and a payout ratio of 62.40%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with CSX P/E ratio at 19.12 and Norfolk Southern's P/E ratio at 29.34. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. CSX P/B ratio is 5.44 while Norfolk Southern's P/B ratio is 4.42.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, CSX has seen a 5-year revenue growth of 0.53%, while Norfolk Southern's is 0.25%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with CSX's ROE at 29.12% and Norfolk Southern's ROE at 15.36%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $34.67 for CSX and $248.26 for Norfolk Southern. Over the past year, CSX's prices ranged from $29.03 to $40.12, with a yearly change of 38.20%. Norfolk Southern's prices fluctuated between $183.09 and $263.66, with a yearly change of 44.01%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.