Norfolk Southern vs Union Pacific Which Is Stronger?

Norfolk Southern Corporation and Union Pacific Corporation are two major players in the railroad industry, dominating the transportation of goods and commodities across the United States. Both companies have experienced fluctuations in their stock prices due to factors such as economic conditions, industry regulations, and competition. Investors often compare Norfolk Southern vs Union Pacific stocks to determine which company offers better growth potential, profitability, and stability. Analyzing key financial metrics and industry trends can help investors make informed decisions about investing in either Norfolk Southern or Union Pacific.

Norfolk Southern or Union Pacific?

When comparing Norfolk Southern and Union Pacific, 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 Norfolk Southern and Union Pacific.

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. Norfolk Southern has a dividend yield of 2.17%, while Union Pacific has a dividend yield of 2.26%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Norfolk Southern reports a 5-year dividend growth of 12.18% year and a payout ratio of 47.36%. On the other hand, Union Pacific reports a 5-year dividend growth of 11.19% year and a payout ratio of 48.15%.

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 Norfolk Southern P/E ratio at 21.80 and Union Pacific's P/E ratio at 21.40. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Norfolk Southern P/B ratio is 4.07 while Union Pacific's P/B ratio is 8.56.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Norfolk Southern has seen a 5-year revenue growth of 0.25%, while Union Pacific's is 0.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Norfolk Southern's ROE at 19.78% and Union Pacific's ROE at 41.79%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $246.08 for Norfolk Southern and $231.89 for Union Pacific. Over the past year, Norfolk Southern's prices ranged from $206.71 to $277.60, with a yearly change of 34.29%. Union Pacific's prices fluctuated between $218.55 and $258.66, with a yearly change of 18.35%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.