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Railway Stocks Head to Head: Union Pacific (UNP) vs. CSX Co. (CSX)
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Union Pacific (UNP - Free Report) and CSX Co. (CSX - Free Report) are two of the largest railway companies in the United States, and operate on opposite sides of the country. The Union Pacific system operates in 23 states west of Chicago, IL and New Orleans, LA. By comparison, the CSX system map starts from the Midwest and spans most of the Eastern U.S.
Both companies currently sit at a Zacks Rank #3 (Hold), and fall within the TRANS-RAIL industry, which currently has a Zacks Industry Rank of 109/265 and falls within the top 41% of all industries.
Although on the surface these two companies appear very similar, we’ll take a deeper look at each one and ascertain which would make the better investment.
CSX
Founded in 1986 by the combination of two railway companies, CSX is based in Jacksonville, FL. Together with its subsidiaries, CSX provides rail-based transportation services in both the U.S. and Canada. Furthermore, it also transports agricultural products, food and beverages, chemicals, automotive products, metals, and industrial products, amongst others. CSX’s rail network currently spans over 21,000 miles.
CSX’s beta of 1.34 indicates that it has 134% the volatility of the market since its listing in November of 1980. CSX has a trailing 12-month Return on Equity of 15.2% and shareholder’s equity, or in other words a net worth of $11.6 billion.
CSX has a P/E (Price-to-Earnings) ratio of 15.41, which compared to the industry average of 16.99 indicates that the company may be a bit overvalued. UNP has a Price/Sales ratio (P/S) of 2.27 and Price/Book ratio (P/B) of 2.23, which are lower and equal to the industry’s 2.40 and 2.23 and further support this idea. These metrics indicate that CSX is, pun intended, on the right track.
There is currently an 83% agreement in downward earnings estimate revisions amongst analysts for Q3, with current estimates at $0.47 per share, down from $0.48 per share 60 days ago. There is also an 89% agreement in downward revisions for this fiscal year, with estimates currently at $1.75 per share, down from $1.79 60 days ago.
CSX surprised on its earnings report Wednesday, where it announced it beat the Zacks Consensus Estimate of $0.44 by three cents (surprise of 6.82%), but narrowly missed revenue estimates. For information on CSX earnings, check out our team’s report.
CSX has an average earnings surprise of 3.79% for the last four quarters.
Union Pacific
Founded in 1862 and based in Omaha, NE, UNP is a name that carries a lot of weight and history. Through its subsidiary, Union Pacific Railroad Company, UNP offers freight transportation for agricultural products, food and beverages, automotive products, and industrial products. UNP’s rail network currently spans 32,084 route miles.
UNP’s beta of 0.96 indicates that it has 96% the volatility of the market based on data from when the stock was first listed in January of 1978. UNP has a trailing 12 month ROE of 22.2%, which given its shareholder’s equity of $20.5 billion is more impressive than CSX, because it is worth more yet managed to make a higher proportion of its worth back.
UNP has a net profit margin of 21.88% this year, a value that has consistently increased for the company over the years. A net profit margin of 21.88% indicates that for every dollar of revenue UNP produces, it generates about 22 cents in profit.
UNP has a P/E ratio of 17.90, which compared to the industry average of 16.99 does indicate that the company may be a bit overvalued at the moment. UNP has a P/S ratio of 3.68 and P/B ratio of 3.78, which are higher than the industry’s 2.40 and 2.23 and further support this idea. However, investors can interpret these values as the confidence of other investors in the value of UNP moving forward.
There is currently 100% agreement in downward earnings estimate revisions amongst analysts for Q2, with current estimates at $1.17 per share, down from $1.20 per share 60 days ago. There is also an 89% agreement in downward revisions for this fiscal year, with estimates currently at $5.14 per share, down from $5.19 60 days ago.
UNP also surprised in its last earnings report, when its reported EPS of $1.16 beat the Zacks Consensus Estimate by $0.07 for a surprise of 6.42%. UNP has an average earnings surprise of 1.48% for the last four quarters.
Bottom Line
Based on their financials, both CSX and UNP are not too far apart in their industry, with CSX slightly undervalued and UNP slightly overvalued. However, UNP is the larger and more profitable company.
Investors should note that both companies do currently sit at a Zacks Rank #3 (Hold), meaning that regardless of which the better investment is, right now may not be the time to jump in. However, based on their long history, stable track record and sheer size, UNP may be a safer bet for long-term portfolios.
However, for those interested in the railway industry, CSX has potential moving forward as well, so investors should keep an eye out for it.
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Railway Stocks Head to Head: Union Pacific (UNP) vs. CSX Co. (CSX)
Union Pacific (UNP - Free Report) and CSX Co. (CSX - Free Report) are two of the largest railway companies in the United States, and operate on opposite sides of the country. The Union Pacific system operates in 23 states west of Chicago, IL and New Orleans, LA. By comparison, the CSX system map starts from the Midwest and spans most of the Eastern U.S.
Both companies currently sit at a Zacks Rank #3 (Hold), and fall within the TRANS-RAIL industry, which currently has a Zacks Industry Rank of 109/265 and falls within the top 41% of all industries.
Although on the surface these two companies appear very similar, we’ll take a deeper look at each one and ascertain which would make the better investment.
CSX
Founded in 1986 by the combination of two railway companies, CSX is based in Jacksonville, FL. Together with its subsidiaries, CSX provides rail-based transportation services in both the U.S. and Canada. Furthermore, it also transports agricultural products, food and beverages, chemicals, automotive products, metals, and industrial products, amongst others. CSX’s rail network currently spans over 21,000 miles.
CSX’s beta of 1.34 indicates that it has 134% the volatility of the market since its listing in November of 1980. CSX has a trailing 12-month Return on Equity of 15.2% and shareholder’s equity, or in other words a net worth of $11.6 billion.
CSX has a P/E (Price-to-Earnings) ratio of 15.41, which compared to the industry average of 16.99 indicates that the company may be a bit overvalued. UNP has a Price/Sales ratio (P/S) of 2.27 and Price/Book ratio (P/B) of 2.23, which are lower and equal to the industry’s 2.40 and 2.23 and further support this idea. These metrics indicate that CSX is, pun intended, on the right track.
There is currently an 83% agreement in downward earnings estimate revisions amongst analysts for Q3, with current estimates at $0.47 per share, down from $0.48 per share 60 days ago. There is also an 89% agreement in downward revisions for this fiscal year, with estimates currently at $1.75 per share, down from $1.79 60 days ago.
CSX surprised on its earnings report Wednesday, where it announced it beat the Zacks Consensus Estimate of $0.44 by three cents (surprise of 6.82%), but narrowly missed revenue estimates. For information on CSX earnings, check out our team’s report.
CSX has an average earnings surprise of 3.79% for the last four quarters.
Union Pacific
Founded in 1862 and based in Omaha, NE, UNP is a name that carries a lot of weight and history. Through its subsidiary, Union Pacific Railroad Company, UNP offers freight transportation for agricultural products, food and beverages, automotive products, and industrial products. UNP’s rail network currently spans 32,084 route miles.
UNP’s beta of 0.96 indicates that it has 96% the volatility of the market based on data from when the stock was first listed in January of 1978. UNP has a trailing 12 month ROE of 22.2%, which given its shareholder’s equity of $20.5 billion is more impressive than CSX, because it is worth more yet managed to make a higher proportion of its worth back.
UNP has a net profit margin of 21.88% this year, a value that has consistently increased for the company over the years. A net profit margin of 21.88% indicates that for every dollar of revenue UNP produces, it generates about 22 cents in profit.
UNP has a P/E ratio of 17.90, which compared to the industry average of 16.99 does indicate that the company may be a bit overvalued at the moment. UNP has a P/S ratio of 3.68 and P/B ratio of 3.78, which are higher than the industry’s 2.40 and 2.23 and further support this idea. However, investors can interpret these values as the confidence of other investors in the value of UNP moving forward.
There is currently 100% agreement in downward earnings estimate revisions amongst analysts for Q2, with current estimates at $1.17 per share, down from $1.20 per share 60 days ago. There is also an 89% agreement in downward revisions for this fiscal year, with estimates currently at $5.14 per share, down from $5.19 60 days ago.
UNP also surprised in its last earnings report, when its reported EPS of $1.16 beat the Zacks Consensus Estimate by $0.07 for a surprise of 6.42%. UNP has an average earnings surprise of 1.48% for the last four quarters.
Bottom Line
Based on their financials, both CSX and UNP are not too far apart in their industry, with CSX slightly undervalued and UNP slightly overvalued. However, UNP is the larger and more profitable company.
Investors should note that both companies do currently sit at a Zacks Rank #3 (Hold), meaning that regardless of which the better investment is, right now may not be the time to jump in. However, based on their long history, stable track record and sheer size, UNP may be a safer bet for long-term portfolios.
However, for those interested in the railway industry, CSX has potential moving forward as well, so investors should keep an eye out for it.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report >>