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Here's Why CSX Corporation is a Must Add to Your Portfolio
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CSX Corporation (CSX - Free Report) stock is performing impressively at the moment. Also, we are optimistic on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock a compelling choice for investors right now.
An Outperformer: CSX has outperformed its industry in a year’s time. Shares of the company have gained 38.8% compared with the industry’s 29.9% growth.
One-year Price Performance
Earnings Estimates Moving Up: Annual estimates for CSX moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for current-year earnings climbed 1.1% to $3.59. For 2019, the consensus mark inched up 0.8% to $3.97 over the same time frame.
Given the wealth of information at their disposal, it is in the best interest of investors to be guided by broker advice and the direction of their estimate revisions. This is because the direction of estimate revisions serves as an important pointer when it comes to the price of a stock.
Solid Growth Prospects: The Zacks Consensus Estimate for CSX’s current-year earnings reflects an expected year-over-year growth of 56.1%. Moreover, the bottom line is anticipated to register a 10.6% growth in 2019. The stock also has an expected earnings per share growth rate of 13.3% for three to five years, higher than the industry average of 10%.
The scenario is bullish with respect to revenues as well. For 2018, the Zacks Consensus Estimate for this railroad operator is approximately $12 billion, representing 5.1% revenue growth over 2017. Next year’s average forecast is $12.41 billion, mirroring 3.5% year-over-year growth.
Positive Earnings Surprise History: CSX has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 12.5%.
Shareholder-Friendly Attitude: We are impressed by the company’s focus on rewarding shareholders through share repurchases and dividends. In February 2018, the company announced a 10% dividend hike to 22 cents per share.
Additionally, the company, which bought back shares worth more than $2 billion in 2017, increased the existing share repurchase program to $5 billion. The $5-billion share repurchase program, $2 billion of which is completed, is expected to be over by the first quarter of 2019.
Volume Growth and Cost Cuts: Volume growth is aiding the company immensely. Moreover, the company is benefiting from the Precision Scheduled Railroading system, which was implemented by the company’s former CEO — E. Hunter Harrison — who expired in December 2017. The system, designed to improve its operational efficiency, is being backed by CSX’s current CEO Jim Foote.
Lower costs and volume growth are expected to aid CSX’s third-quarter 2018 results, scheduled to be disclosed on Oct 16.
Shares of Trinity Industries, Matson and ArcBest have gained 15.1%, 34.7% and 41.7% in the past six months, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
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Here's Why CSX Corporation is a Must Add to Your Portfolio
CSX Corporation (CSX - Free Report) stock is performing impressively at the moment. Also, we are optimistic on the company’s prospects and believe that the time is right for you to add the stock to portfolio as it looks promising and is poised to carry the momentum ahead.
Let’s take a look into the factors that make this Zacks Rank #2 (Buy) stock a compelling choice for investors right now.
An Outperformer: CSX has outperformed its industry in a year’s time. Shares of the company have gained 38.8% compared with the industry’s 29.9% growth.
One-year Price Performance
Earnings Estimates Moving Up: Annual estimates for CSX moved north over the past two months, reflecting analysts’ confidence on the stock. Over this period, the Zacks Consensus Estimate for current-year earnings climbed 1.1% to $3.59. For 2019, the consensus mark inched up 0.8% to $3.97 over the same time frame.
Given the wealth of information at their disposal, it is in the best interest of investors to be guided by broker advice and the direction of their estimate revisions. This is because the direction of estimate revisions serves as an important pointer when it comes to the price of a stock.
Solid Growth Prospects: The Zacks Consensus Estimate for CSX’s current-year earnings reflects an expected year-over-year growth of 56.1%. Moreover, the bottom line is anticipated to register a 10.6% growth in 2019. The stock also has an expected earnings per share growth rate of 13.3% for three to five years, higher than the industry average of 10%.
The scenario is bullish with respect to revenues as well. For 2018, the Zacks Consensus Estimate for this railroad operator is approximately $12 billion, representing 5.1% revenue growth over 2017. Next year’s average forecast is $12.41 billion, mirroring 3.5% year-over-year growth.
Positive Earnings Surprise History: CSX has an impressive earnings surprise history. It has outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering a positive average earnings surprise of 12.5%.
Shareholder-Friendly Attitude: We are impressed by the company’s focus on rewarding shareholders through share repurchases and dividends. In February 2018, the company announced a 10% dividend hike to 22 cents per share.
Additionally, the company, which bought back shares worth more than $2 billion in 2017, increased the existing share repurchase program to $5 billion. The $5-billion share repurchase program, $2 billion of which is completed, is expected to be over by the first quarter of 2019.
Volume Growth and Cost Cuts: Volume growth is aiding the company immensely. Moreover, the company is benefiting from the Precision Scheduled Railroading system, which was implemented by the company’s former CEO — E. Hunter Harrison — who expired in December 2017. The system, designed to improve its operational efficiency, is being backed by CSX’s current CEO Jim Foote.
Lower costs and volume growth are expected to aid CSX’s third-quarter 2018 results, scheduled to be disclosed on Oct 16.
Other Stocks to Consider
Investors interested in the broader Transportation Sector may also consider stocks like Trinity Industries, Inc. (TRN - Free Report) , Matson, Inc. (MATX - Free Report) and ArcBest Corporation (ARCB - Free Report) , each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of Trinity Industries, Matson and ArcBest have gained 15.1%, 34.7% and 41.7% in the past six months, respectively.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce "the world's first trillionaires," but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>