NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis
NYSE:NSC - New York Stock Exchange, Inc. - US6558441084 - Common Stock - Currency: USD
Overall NSC gets a fundamental rating of 5 out of 10. We evaluated NSC against 39 industry peers in the Ground Transportation industry. While NSC belongs to the best of the industry regarding profitability, there are concerns on its financial health. NSC has a decent growth rate and is not valued too expensively. Finally NSC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year NSC was profitable.
In the past year NSC had a positive cash flow from operations.
In the past 5 years NSC has always been profitable.
NSC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NSC has a better Return On Assets (7.57%) than 76.92% of its industry peers.
The Return On Equity of NSC (22.85%) is better than 84.62% of its industry peers.
NSC has a better Return On Invested Capital (9.05%) than 74.36% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NSC is in line with the industry average of 8.06%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.57% | ||
| ROE | 22.85% | ||
| ROIC | 9.05% |
ROA(3y)6.26%
ROA(5y)6.38%
ROE(3y)19.41%
ROE(5y)18.77%
ROIC(3y)9.15%
ROIC(5y)8.93%
1.3 Margins
With an excellent Profit Margin value of 27.38%, NSC belongs to the best of the industry, outperforming 94.87% of the companies in the same industry.
In the last couple of years the Profit Margin of NSC has declined.
NSC's Operating Margin of 38.28% is amongst the best of the industry. NSC outperforms 97.44% of its industry peers.
In the last couple of years the Operating Margin of NSC has remained more or less at the same level.
With a decent Gross Margin value of 51.12%, NSC is doing good in the industry, outperforming 64.10% of the companies in the same industry.
NSC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.28% | ||
| PM (TTM) | 27.38% | ||
| GM | 51.12% |
OM growth 3Y-1.82%
OM growth 5Y1.35%
PM growth 3Y-7.11%
PM growth 5Y-2.12%
GM growth 3Y-0.74%
GM growth 5Y1.7%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), NSC is destroying value.
NSC has more shares outstanding than it did 1 year ago.
The number of shares outstanding for NSC has been reduced compared to 5 years ago.
Compared to 1 year ago, NSC has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.17 indicates that NSC is not a great score, but indicates only limited risk for bankruptcy at the moment.
NSC has a Altman-Z score of 2.17. This is comparable to the rest of the industry: NSC outperforms 46.15% of its industry peers.
NSC has a debt to FCF ratio of 9.11. This is a negative value and a sign of low solvency as NSC would need 9.11 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.11, NSC is in the better half of the industry, outperforming 69.23% of the companies in the same industry.
NSC has a Debt/Equity ratio of 1.15. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of NSC (1.15) is worse than 74.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 9.11 | ||
| Altman-Z | 2.17 |
ROIC/WACC0.97
WACC9.29%
2.3 Liquidity
NSC has a Current Ratio of 0.78. This is a bad value and indicates that NSC is not financially healthy enough and could expect problems in meeting its short term obligations.
NSC has a Current ratio of 0.78. This is in the lower half of the industry: NSC underperforms 79.49% of its industry peers.
A Quick Ratio of 0.70 indicates that NSC may have some problems paying its short term obligations.
NSC has a worse Quick ratio (0.70) than 84.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.7 |
3. Growth
3.1 Past
NSC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.26%, which is quite good.
NSC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.93% yearly.
Looking at the last year, NSC shows a small growth in Revenue. The Revenue has grown by 0.70% in the last year.
NSC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.42% yearly.
EPS 1Y (TTM)10.26%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%8.03%
Revenue 1Y (TTM)0.7%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%-0.37%
3.2 Future
NSC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 9.87% yearly.
NSC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.19% yearly.
EPS Next Y7.81%
EPS Next 2Y10.41%
EPS Next 3Y10.96%
EPS Next 5Y9.87%
Revenue Next Year1.69%
Revenue Next 2Y3.01%
Revenue Next 3Y3.65%
Revenue Next 5Y4.19%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
NSC is valuated rather expensively with a Price/Earnings ratio of 20.87.
Based on the Price/Earnings ratio, NSC is valued a bit cheaper than 69.23% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.55, NSC is valued a bit cheaper.
A Price/Forward Earnings ratio of 17.41 indicates a rather expensive valuation of NSC.
Based on the Price/Forward Earnings ratio, NSC is valued a bit cheaper than 66.67% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 22.40. NSC is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.87 | ||
| Fwd PE | 17.41 |
4.2 Price Multiples
NSC's Enterprise Value to EBITDA is on the same level as the industry average.
NSC's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. NSC is cheaper than 74.36% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.99 | ||
| EV/EBITDA | 12.21 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NSC does not grow enough to justify the current Price/Earnings ratio.
NSC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.67
PEG (5Y)7.13
EPS Next 2Y10.41%
EPS Next 3Y10.96%
5. Dividend
5.1 Amount
NSC has a Yearly Dividend Yield of 2.19%.
Compared to an average industry Dividend Yield of 1.58, NSC pays a better dividend. On top of this NSC pays more dividend than 94.87% of the companies listed in the same industry.
NSC's Dividend Yield is comparable with the S&P500 average which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.19% |
5.2 History
On average, the dividend of NSC grows each year by 8.41%, which is quite nice.
NSC has been paying a dividend for at least 10 years, so it has a reliable track record.
NSC has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)8.41%
Div Incr Years0
Div Non Decr Years23
5.3 Sustainability
NSC pays out 36.85% of its income as dividend. This is a sustainable payout ratio.
NSC's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP36.85%
EPS Next 2Y10.41%
EPS Next 3Y10.96%
251.33
-1.59 (-0.63%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners79.49%
Inst Owner Change-0.19%
Ins Owners0.03%
Ins Owner Change1.03%
Market Cap56.66B
Analysts75.48
Price Target264.69 (5.32%)
Short Float %1.41%
Short Ratio2.3
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.19% |
Yearly Dividend5.4
Dividend Growth(5Y)8.41%
DP36.85%
Div Incr Years0
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.47%
Min EPS beat(2)-0.99%
Max EPS beat(2)1.93%
EPS beat(4)3
Avg EPS beat(4)2.58%
Min EPS beat(4)-0.99%
Max EPS beat(4)5.87%
EPS beat(8)3
Avg EPS beat(8)-0.69%
EPS beat(12)5
Avg EPS beat(12)0.69%
EPS beat(16)8
Avg EPS beat(16)1.46%
Revenue beat(2)0
Avg Revenue beat(2)-0.72%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)-0.43%
Revenue beat(4)0
Avg Revenue beat(4)-1.09%
Min Revenue beat(4)-2.12%
Max Revenue beat(4)-0.43%
Revenue beat(8)0
Avg Revenue beat(8)-1.55%
Revenue beat(12)3
Avg Revenue beat(12)-0.62%
Revenue beat(16)7
Avg Revenue beat(16)-0.12%
PT rev (1m)-1.17%
PT rev (3m)-6.59%
EPS NQ rev (1m)0.34%
EPS NQ rev (3m)-0.86%
EPS NY rev (1m)-0.71%
EPS NY rev (3m)-3.04%
Revenue NQ rev (1m)0.16%
Revenue NQ rev (3m)-0.32%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.87 | ||
| Fwd PE | 17.41 | ||
| P/S | 4.68 | ||
| P/FCF | 29.99 | ||
| P/OCF | 13.61 | ||
| P/B | 3.9 | ||
| P/tB | 3.9 | ||
| EV/EBITDA | 12.21 |
EPS(TTM)12.04
EY4.79%
EPS(NY)14.43
Fwd EY5.74%
FCF(TTM)8.38
FCFY3.33%
OCF(TTM)18.47
OCFY7.35%
SpS53.73
BVpS64.37
TBVpS64.37
PEG (NY)2.67
PEG (5Y)7.13
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.57% | ||
| ROE | 22.85% | ||
| ROCE | 11.49% | ||
| ROIC | 9.05% | ||
| ROICexc | 9.28% | ||
| ROICexgc | 9.28% | ||
| OM | 38.28% | ||
| PM (TTM) | 27.38% | ||
| GM | 51.12% | ||
| FCFM | 15.6% |
ROA(3y)6.26%
ROA(5y)6.38%
ROE(3y)19.41%
ROE(5y)18.77%
ROIC(3y)9.15%
ROIC(5y)8.93%
ROICexc(3y)9.43%
ROICexc(5y)9.19%
ROICexgc(3y)9.43%
ROICexgc(5y)9.19%
ROCE(3y)11.62%
ROCE(5y)11.33%
ROICexcg growth 3Y-2.05%
ROICexcg growth 5Y0.88%
ROICexc growth 3Y-2.05%
ROICexc growth 5Y0.88%
OM growth 3Y-1.82%
OM growth 5Y1.35%
PM growth 3Y-7.11%
PM growth 5Y-2.12%
GM growth 3Y-0.74%
GM growth 5Y1.7%
F-Score8
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.15 | ||
| Debt/FCF | 9.11 | ||
| Debt/EBITDA | 2.78 | ||
| Cap/Depr | 166.96% | ||
| Cap/Sales | 18.77% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.41% | ||
| Profit Quality | 56.97% | ||
| Current Ratio | 0.78 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 2.17 |
F-Score8
WACC9.29%
ROIC/WACC0.97
Cap/Depr(3y)212.64%
Cap/Depr(5y)178.37%
Cap/Sales(3y)22.6%
Cap/Sales(5y)19.25%
Profit Quality(3y)38.72%
Profit Quality(5y)63.1%
High Growth Momentum
Growth
EPS 1Y (TTM)10.26%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%8.03%
EPS Next Y7.81%
EPS Next 2Y10.41%
EPS Next 3Y10.96%
EPS Next 5Y9.87%
Revenue 1Y (TTM)0.7%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%-0.37%
Revenue Next Year1.69%
Revenue Next 2Y3.01%
Revenue Next 3Y3.65%
Revenue Next 5Y4.19%
EBIT growth 1Y22.87%
EBIT growth 3Y0.98%
EBIT growth 5Y2.8%
EBIT Next Year39.42%
EBIT Next 3Y17.06%
EBIT Next 5Y12.96%
FCF growth 1Y-21.75%
FCF growth 3Y-78.42%
FCF growth 5Y-56.86%
OCF growth 1Y-5.41%
OCF growth 3Y-1.62%
OCF growth 5Y0.81%