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Why You Should Add Norfolk Southern (NSC) to Your Portfolio

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Norfolk Southern Corporation (NSC - Free Report) had an impressive first-quarter 2017, reporting better-than-expected earnings and revenues. Both metrics also improved on a year-over-year basis. Volume growth aided the results. This upgrading in coal revenues is very encouraging. Further, revenues got enhanced at the company’s merchandise and intermodal units.

Maintaining an impressive profile, the company focuses on rewarding shareholders through share repurchases and dividends. In 2017, the company raised its quarterly cash dividend by 3% to $0.61 per share (annualized $2.44 per share).

Having paid dividends for 138 consecutive quarters, the company has shelled out $700 million in the said section and repurchased shares worth $800 million in 2016. It intends to buy back shares worth $800 million in full-year 2017 as well.

Norfolk Southern is making constant efforts to streamline operations and increase productivity. The company is looking to cut costs to drive the bottom line. To attain this objective, it wishes to curtail costs by an additional $100 million in 2017.

The company is on track to deliver annual savings to the tune of $650 million by 2020. Operating ratio of below 65% is also targeted by 2020.

Price Performance

Shares of Norfolk Southern gained 5.84% in last one month outperforming the Zacks categorized Transportation - Rail industry’s increase of 3.73% over same period.

The above positives substantiate Norfolk Southern’s Zacks Rank #2 (Buy). Seems the time is ripe for investors to add this stock to their portfolio. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Stocks to Consider

Other favorably placed stocks worth considering in the transportation sector are CSX Corp. (CSX - Free Report) , Alstom ADR (ALSMY - Free Report) and Union Pacific Corp. (UNP - Free Report) . CSX sports a Zacks Rank #1 (Strong Buy), while Alstom and Union Pacific carry a Zacks Rank #2 (Buy).

Shares of CSX, Alstom and Union Pacific gained over 50%, 28% and 6%, respectively, on a year-to-date basis.

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