Canadian National Railway (NYSE:CNI) and CSX (NASDAQ:CSX) are both large-cap transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.
Earnings & Valuation
This table compares Canadian National Railway and CSX's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Canadian National Railway | $11.30 billion | 7.01 | $3.18 billion | $4.39 | 25.41 |
CSX | $11.94 billion | 5.90 | $3.33 billion | $4.17 | 22.14 |
CSX has higher revenue and earnings than Canadian National Railway. CSX is trading at a lower price-to-earnings ratio than Canadian National Railway, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Canadian National Railway and CSX's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Canadian National Railway | 24.90% | 19.55% | 8.12% |
CSX | 26.08% | 22.83% | 7.14% |
Dividends
Canadian National Railway pays an annual dividend of $1.80 per share and has a dividend yield of 1.6%. CSX pays an annual dividend of $1.12 per share and has a dividend yield of 1.2%. Canadian National Railway pays out 41.0% of its earnings in the form of a dividend. CSX pays out 26.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Canadian National Railway has increased its dividend for 1 consecutive years and CSX has increased its dividend for 1 consecutive years.
Insider and Institutional Ownership
54.2% of Canadian National Railway shares are held by institutional investors. Comparatively, 73.8% of CSX shares are held by institutional investors. 2.4% of Canadian National Railway shares are held by company insiders. Comparatively, 0.6% of CSX shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Canadian National Railway has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, CSX has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and target prices for Canadian National Railway and CSX, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Canadian National Railway | 0 | 15 | 7 | 0 | 2.32 |
CSX | 1 | 6 | 17 | 0 | 2.67 |
Canadian National Railway currently has a consensus target price of $118.35, suggesting a potential upside of 6.10%. CSX has a consensus target price of $89.8077, suggesting a potential downside of 2.72%. Given Canadian National Railway's higher possible upside, equities analysts clearly believe Canadian National Railway is more favorable than CSX.
Summary
CSX beats Canadian National Railway on 9 of the 16 factors compared between the two stocks.