Breaking News
0

Why Are Norfolk Southern (NSC) Shares Up More Than 16% YTD?

By Zacks Investment ResearchStock MarketsAug 19, 2019 11:52PM ET
www.investing.com/analysis/why-are-norfolk-southern-nsc-shares-up-more-than-16-ytd-200456834
Why Are Norfolk Southern (NSC) Shares Up More Than 16% YTD?
By Zacks Investment Research   |  Aug 19, 2019 11:52PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 

Shares of Norfolk Southern Corporation (NYSE:NSC) have rallied 16.6% so far this year, primarily owing to the company’s consistent cost-containment measures. Additionally, its endeavors to reward shareholders through dividends and share buybacks are also encouraging.


Let’s delve into the details.

Norfolk Southern is making constant efforts to streamline operations with an eye on increasing productivity. In line with its efforts to improve efficiencies, the company’s operating ratio (operating expenses as a percentage of revenues) improved to 64.8% in the first half of 2019 from 66.9% a year ago. Notably, lower the value of the metric, the better. This key metric is benefiting from the company’s low operating expenses, courtesy of modest fuel prices.

In a bid to improve efficiencies and customer service further, the company has implemented the precision scheduled railroading operating plan, TOP21. Gaining traction from this model, the company predicts its operating ratio (operating expenses as a percentage of revenues) to improve at least 100 basis points in 2019 compared with 65.4% achieved in 2018. Additionally, the company aims for a full-year operating ratio of 60% by 2021.

As far as the company’s measures to reward shareholders through dividends and share buybacks are concerned, it has returned $1.5 billion to its shareholders through dividend payouts ($458 million) and repurchases ($1,050 million) in the first half of 2019, reflecting a 36% year-over-year increase. Additionally, this July, the company’s board announced a dividend hike of 9% to 94 cents a share ($3.76 annually). The fact that the company has generated free cash flow of $973 million during the first half of 2019 hints at an uptick in such shareholder-friendly activities.

Further, increase in revenue per unit has aided the company’s top line in the first six months of 2019. While the top line rose 4.5% in the first quarter, it inched up 1% in the second. Higher revenues helped the company generate earnings growth of 30.1% and 8% in the first and second quarter of 2019, respectively.

Zacks Rank & Key Picks

Norfolk Southern carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Canadian Pacific Railway Limited (NYSE:CP) , GATX Corporation (NYSE:GATX) and Delta Air Lines, Inc. (NYSE:DAL) . While Delta sports a Zacks Rank #1 (Strong Buy), Canadian Pacific and GATX carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Canadian Pacific, GATX and Delta have gained more than 35%, 6% and 16% so far this year, respectively.

Legalizing THIS Could Be Even Bigger than Marijuana

Americans spend an estimated $150 billion in this industry every year… more than twice as much as they
spend on marijuana.

Now that 8 states have fully-legalized it (with several more states following close behind), Zacks has
identified 5 stocks that could soar in response to the powerful demand. One industry insider described
the future as “mind-blowing” – and early investors can still get in ahead of the surge.

See these 5 “sin stocks” now >>



Delta Air Lines, Inc. (DAL): Free Stock Analysis Report

GATX Corporation (GATX): Free Stock Analysis Report

Canadian Pacific Railway Limited (CP): Free Stock Analysis Report

Norfolk Southern Corporation (NSC): Free Stock Analysis Report

Original post

Zacks Investment Research
Why Are Norfolk Southern (NSC) Shares Up More Than 16% YTD?
 
Why Are Norfolk Southern (NSC) Shares Up More Than 16% YTD?

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email