Norfolk Southern Corporation (NSC - Free Report) stock has moved up 12.5% in the past year compared with 10.3% growth of the industry it belongs to.
For 2021, earnings and revenues are expected to grow at a rate of 29% and 12.4% on a year-over-year basis, respectively.
Key Growth Drivers
Norfolk Southern’s liquidity position is encouraging. The company exited the June-end quarter with cash and cash equivalents of $1,670 million compared with the current debt of $1,048 million. Additionally, its current ratio (a measure of liquidity) at the end of the June quarter stood at 1.08, higher than the March quarter's reading of 1.02.
Despite coronavirus-related woes, Norfolk Southern is committed to rewarding its shareholders. During 2020, Norfolk Southern generated free cash flow of $2.1 billion, up 14% year over year. In first-half 2021, the company paid $496 million to its shareholders through dividends and repurchased shares worth $1,525 million. In its latest shareholder-friendly move, the company's board approved a 10% quarterly dividend hike to $1.09 per share in July 2021. This was the second time this year that the company had increased its dividend payout. Free cash flow generation by the company supports its shareholder-friendly approach. In the first six months of 2021, the company generated free cash flow to the tune of $1,470 million, up 44% year over year.
Primary Concern
Increase in fuel costs due to the uptick in oil prices is limiting bottom-line growth. In second-quarter 2021, expenses on fuel increased more than 100%, inducing an 11% rise in operating expenses. In the April-June period, oil prices increased 24.2%. In the first six months of 2021, expenses on fuel increased 34% year over year to $365 million at Norfolk Southern.
Zacks Rank & Stocks to Consider
Norfolk Southern currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are Schneider National, Inc. (SNDR - Free Report) , C.H. Robinson Worldwide, Inc. (CHRW - Free Report) and TFI International Inc. (TFII - Free Report) . All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for Schneider National, C.H. Robinson and TFI International is pegged at 17.9%, 9% and 31.6%, respectively.
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It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
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Norfolk Southern Corporation (NSC - Free Report) stock has moved up 12.5% in the past year compared with 10.3% growth of the industry it belongs to.
For 2021, earnings and revenues are expected to grow at a rate of 29% and 12.4% on a year-over-year basis, respectively.
Key Growth Drivers
Norfolk Southern’s liquidity position is encouraging. The company exited the June-end quarter with cash and cash equivalents of $1,670 million compared with the current debt of $1,048 million. Additionally, its current ratio (a measure of liquidity) at the end of the June quarter stood at 1.08, higher than the March quarter's reading of 1.02.
Despite coronavirus-related woes, Norfolk Southern is committed to rewarding its shareholders. During 2020, Norfolk Southern generated free cash flow of $2.1 billion, up 14% year over year. In first-half 2021, the company paid $496 million to its shareholders through dividends and repurchased shares worth $1,525 million. In its latest shareholder-friendly move, the company's board approved a 10% quarterly dividend hike to $1.09 per share in July 2021. This was the second time this year that the company had increased its dividend payout. Free cash flow generation by the company supports its shareholder-friendly approach. In the first six months of 2021, the company generated free cash flow to the tune of $1,470 million, up 44% year over year.
Primary Concern
Increase in fuel costs due to the uptick in oil prices is limiting bottom-line growth. In second-quarter 2021, expenses on fuel increased more than 100%, inducing an 11% rise in operating expenses. In the April-June period, oil prices increased 24.2%. In the first six months of 2021, expenses on fuel increased 34% year over year to $365 million at Norfolk Southern.
Zacks Rank & Stocks to Consider
Norfolk Southern currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the Zacks Transportation sector are Schneider National, Inc. (SNDR - Free Report) , C.H. Robinson Worldwide, Inc. (CHRW - Free Report) and TFI International Inc. (TFII - Free Report) . All the stocks carry a Zacks Rank #2. You can see the complete list of today’s Zacks #1(Strong Buy) Rank stocks here.
Long-term expected earnings per share (three to five years) growth rate for Schneider National, C.H. Robinson and TFI International is pegged at 17.9%, 9% and 31.6%, respectively.
Zacks Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
It’s a little-known chemical company that’s up 65% over last year, yet still dirt cheap. With unrelenting demand, soaring 2022 earnings estimates, and $1.5 billion for repurchasing shares, retail investors could jump in at any time.
This company could rival or surpass other recent Zacks’ Stocks Set to Double like Boston Beer Company which shot up +143.0% in little more than 9 months and NVIDIA which boomed +175.9% in one year.
Free: See Our Top Stock and 4 Runners Up >>
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