Union Pacific vs CSX Which Should You Buy?

Union Pacific and CSX are two of the biggest players in the railroad industry, both operating massive networks that span across the United States. While they both transport goods and materials, their stocks have seen different performances in recent years. Union Pacific has historically been seen as a strong investment option with stable growth and dividends, while CSX has been more volatile but has shown potential for higher returns. Investors should carefully consider their individual financial goals and risk tolerance when deciding between Union Pacific and CSX stocks.

Union Pacific or CSX?

When comparing Union Pacific and CSX, 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 Union Pacific and CSX.

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. Union Pacific has a dividend yield of 2.25%, while CSX has a dividend yield of 1.44%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Union Pacific reports a 5-year dividend growth of 11.19% year and a payout ratio of 48.15%. On the other hand, CSX reports a 5-year dividend growth of -12.94% year and a payout ratio of 25.19%.

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 Union Pacific P/E ratio at 21.51 and CSX's P/E ratio at 17.70. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Union Pacific P/B ratio is 8.61 while CSX's P/B ratio is 4.98.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Union Pacific has seen a 5-year revenue growth of 0.30%, while CSX's is 0.53%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Union Pacific's ROE at 41.79% and CSX's ROE at 28.93%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $233.18 for Union Pacific and $33.23 for CSX. Over the past year, Union Pacific's prices ranged from $218.55 to $258.66, with a yearly change of 18.35%. CSX's prices fluctuated between $31.74 and $40.12, with a yearly change of 26.40%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.