Norfolk Southern (NYSE:NSC) and Canadian National Railway (NYSE:CNI) are both large-cap transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitability, risk, analyst recommendations, valuation and dividends.
Earnings & Valuation
This table compares Norfolk Southern and Canadian National Railway's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Norfolk Southern | $11.30 billion | 6.07 | $2.72 billion | $10.34 | 24.38 |
Canadian National Railway | $11.30 billion | 6.87 | $3.18 billion | $4.39 | 24.90 |
Canadian National Railway has higher revenue and earnings than Norfolk Southern. Norfolk Southern 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.
Dividends
Norfolk Southern pays an annual dividend of $3.96 per share and has a dividend yield of 1.6%. Canadian National Railway pays an annual dividend of $1.80 per share and has a dividend yield of 1.6%. Norfolk Southern pays out 38.3% of its earnings in the form of a dividend. Canadian National Railway pays out 41.0% 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. Norfolk Southern has raised its dividend for 1 consecutive years and Canadian National Railway has raised its dividend for 1 consecutive years.
Volatility & Risk
Norfolk Southern has a beta of 1.38, suggesting that its stock price is 38% more volatile than the S&P 500. Comparatively, Canadian National Railway has a beta of 0.83, suggesting that its stock price is 17% less volatile than the S&P 500.
Institutional & Insider Ownership
67.3% of Norfolk Southern shares are owned by institutional investors. Comparatively, 54.2% of Canadian National Railway shares are owned by institutional investors. 0.3% of Norfolk Southern shares are owned by company insiders. Comparatively, 2.4% of Canadian National Railway shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares Norfolk Southern and Canadian National Railway's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Norfolk Southern | 20.27% | 15.83% | 6.26% |
Canadian National Railway | 24.90% | 19.55% | 8.12% |
Analyst Recommendations
This is a summary of recent ratings and price targets for Norfolk Southern and Canadian National Railway, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Norfolk Southern | 2 | 5 | 13 | 1 | 2.62 |
Canadian National Railway | 0 | 15 | 7 | 0 | 2.32 |
Norfolk Southern currently has a consensus price target of $232.7826, indicating a potential downside of 7.65%. Canadian National Railway has a consensus price target of $118.35, indicating a potential upside of 8.26%. Given Canadian National Railway's higher possible upside, analysts plainly believe Canadian National Railway is more favorable than Norfolk Southern.
Summary
Canadian National Railway beats Norfolk Southern on 9 of the 17 factors compared between the two stocks.