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CSX Corporation (CSX) - $25 value - yours FREE >>
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CSX Corporation (CSX) - $25 value - yours FREE >>
C.H. Robinson Worldwide, Inc. (CHRW) - $25 value - yours FREE >>
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Here's Why You Should Retain CSX Corp (CSX) in Your Portfolio
CSX Corporation (CSX - Free Report) stock has moved up 18.5% in the past year compared with 11.2% growth of the industry it belongs to.
For 2021, earnings are expected to grow at a rate of 23% on a year-over-year basis.
Key Growth Drivers
CSX’s cash and cash equivalents stood at $2,990 million at the end of the second quarter of 2021, much higher than the current debt of $122 million. This indicates that the company has sufficient cash to meet its current debt obligations. Moreover, the company’s increasing current ratio is encouraging. At the end of the second quarter of 2021, CSX’s current ratio was 2.34, higher than 2.2 at the end of the fourth quarter of 2020. Higher the current ratio, the more capable the company is to repay its current obligations.
With improvement in the freight environment, CSX’s volumes recovered significantly. In the first half of 2021, total volumes increased 13% with higher volumes across all segments. As the economy continues to recover, CSX anticipates volumes to keep improving. The company hopes to achieve double-digit revenue growth (excluding benefits from Quality Carriers transaction) in 2021.
Primary Concern
In spite of an increase in volumes from 2020 levels, revenues in the September quarter are likely to be impacted by the Delta strain and Hurricane Ida-related woes. With shipment of goods dented by these headwinds, overall volumes are likely to decline sequentially.
Zacks Rank & Stocks to Consider
CSX 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.