NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis
NYSE:NSC - US6558441084 - Common Stock
277.75 USD
-2.01 (-0.72%)
278.07 USD
+0.32 (+0.12%)
We assign a fundamental rating of 5 out of 10 to NSC. NSC was compared to 41 industry peers in the Ground Transportation industry. NSC scores excellent on profitability, but there are concerns on its financial health. NSC has a correct valuation and a medium growth rate. Finally NSC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
NSC had positive earnings in the past year.
In the past year NSC had a positive cash flow from operations.
In the past 5 years NSC has always been profitable.
Each year in the past 5 years NSC had a positive operating cash flow.
1.2 Ratios
NSC has a Return On Assets of 7.58%. This is in the better half of the industry: NSC outperforms 78.05% of its industry peers.
Looking at the Return On Equity, with a value of 22.63%, NSC belongs to the top of the industry, outperforming 87.80% of the companies in the same industry.
With a decent Return On Invested Capital value of 9.16%, NSC is doing good in the industry, outperforming 73.17% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for NSC is in line with the industry average of 7.92%.
The 3 year average ROIC (9.15%) for NSC is below the current ROIC(9.16%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 22.63% | ||
| ROIC | 9.16% |
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
NSC has a Profit Margin of 27.48%. This is amongst the best in the industry. NSC outperforms 92.68% of its industry peers.
NSC's Profit Margin has declined in the last couple of years.
The Operating Margin of NSC (38.68%) is better than 97.56% of its industry peers.
In the last couple of years the Operating Margin of NSC has remained more or less at the same level.
Looking at the Gross Margin, with a value of 51.67%, NSC is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
In the last couple of years the Gross Margin of NSC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.68% | ||
| PM (TTM) | 27.48% | ||
| GM | 51.67% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so NSC is still creating some value.
The number of shares outstanding for NSC has been increased compared to 1 year ago.
NSC has less shares outstanding than it did 5 years ago.
NSC has a better debt/assets ratio than last year.
2.2 Solvency
NSC has an Altman-Z score of 2.29. This is not the best score and indicates that NSC is in the grey zone with still only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.29, NSC perfoms like the industry average, outperforming 53.66% of the companies in the same industry.
NSC has a debt to FCF ratio of 8.58. This is a slightly negative value and a sign of low solvency as NSC would need 8.58 years to pay back of all of its debts.
NSC has a better Debt to FCF ratio (8.58) than 70.73% of its industry peers.
A Debt/Equity ratio of 1.11 is on the high side and indicates that NSC has dependencies on debt financing.
With a Debt to Equity ratio value of 1.11, NSC is not doing good in the industry: 75.61% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 8.58 | ||
| Altman-Z | 2.29 |
ROIC/WACC1
WACC9.14%
2.3 Liquidity
A Current Ratio of 0.79 indicates that NSC may have some problems paying its short term obligations.
NSC has a worse Current ratio (0.79) than 75.61% of its industry peers.
A Quick Ratio of 0.71 indicates that NSC may have some problems paying its short term obligations.
The Quick ratio of NSC (0.71) is worse than 78.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
NSC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.24%, 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 0.71% in the last year.
The Revenue has been growing slightly by 1.42% on average over the past years.
EPS 1Y (TTM)11.24%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%7.52%
Revenue 1Y (TTM)0.71%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%2.17%
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 8.85% yearly.
The Revenue is expected to grow by 3.45% on average over the next years.
EPS Next Y7.33%
EPS Next 2Y9.48%
EPS Next 3Y9.7%
EPS Next 5Y8.85%
Revenue Next Year1.62%
Revenue Next 2Y2.97%
Revenue Next 3Y3.4%
Revenue Next 5Y3.45%
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
A Price/Earnings ratio of 22.64 indicates a rather expensive valuation of NSC.
NSC's Price/Earnings ratio is a bit cheaper when compared to the industry. NSC is cheaper than 73.17% of the companies in the same industry.
NSC's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.06.
With a Price/Forward Earnings ratio of 19.57, NSC is valued on the expensive side.
Based on the Price/Forward Earnings ratio, NSC is valued a bit cheaper than 63.41% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.69, NSC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.64 | ||
| Fwd PE | 19.57 |
4.2 Price Multiples
NSC's Enterprise Value to EBITDA is on the same level as the industry average.
73.17% of the companies in the same industry are more expensive than NSC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.79 | ||
| EV/EBITDA | 12.96 |
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.
The excellent profitability rating of NSC may justify a higher PE ratio.
PEG (NY)3.09
PEG (5Y)7.74
EPS Next 2Y9.48%
EPS Next 3Y9.7%
5. Dividend
5.1 Amount
NSC has a Yearly Dividend Yield of 1.93%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.57, NSC pays a better dividend. On top of this NSC pays more dividend than 82.93% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.32, NSC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.41%
Div Incr Years0
Div Non Decr Years23
5.3 Sustainability
NSC pays out 36.45% of its income as dividend. This is a sustainable payout ratio.
The dividend of NSC is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP36.45%
EPS Next 2Y9.48%
EPS Next 3Y9.7%
277.75
-2.01 (-0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners79.66%
Inst Owner Change-4.81%
Ins Owners0.02%
Ins Owner Change0.53%
Market Cap62.31B
Analysts70
Price Target302.09 (8.76%)
Short Float %1.05%
Short Ratio1.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.93% |
Yearly Dividend5.4
Dividend Growth(5Y)8.41%
DP36.45%
Div Incr Years0
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.19%
Min EPS beat(2)-1.39%
Max EPS beat(2)-0.99%
EPS beat(4)2
Avg EPS beat(4)0.76%
Min EPS beat(4)-1.39%
Max EPS beat(4)3.5%
EPS beat(8)3
Avg EPS beat(8)-0.08%
EPS beat(12)5
Avg EPS beat(12)0.7%
EPS beat(16)7
Avg EPS beat(16)0.76%
Revenue beat(2)0
Avg Revenue beat(2)-1.02%
Min Revenue beat(2)-1.61%
Max Revenue beat(2)-0.43%
Revenue beat(4)0
Avg Revenue beat(4)-1.29%
Min Revenue beat(4)-2.12%
Max Revenue beat(4)-0.43%
Revenue beat(8)0
Avg Revenue beat(8)-1.24%
Revenue beat(12)2
Avg Revenue beat(12)-0.98%
Revenue beat(16)6
Avg Revenue beat(16)-0.28%
PT rev (1m)8.42%
PT rev (3m)13.51%
EPS NQ rev (1m)-0.02%
EPS NQ rev (3m)-3.84%
EPS NY rev (1m)-0.31%
EPS NY rev (3m)-0.45%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-1.28%
Revenue NY rev (1m)-0.23%
Revenue NY rev (3m)0.03%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.64 | ||
| Fwd PE | 19.57 | ||
| P/S | 5.12 | ||
| P/FCF | 30.79 | ||
| P/OCF | 14.82 | ||
| P/B | 4.21 | ||
| P/tB | 4.21 | ||
| EV/EBITDA | 12.96 |
EPS(TTM)12.27
EY4.42%
EPS(NY)14.19
Fwd EY5.11%
FCF(TTM)9.02
FCFY3.25%
OCF(TTM)18.74
OCFY6.75%
SpS54.28
BVpS65.91
TBVpS65.91
PEG (NY)3.09
PEG (5Y)7.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 22.63% | ||
| ROCE | 11.64% | ||
| ROIC | 9.16% | ||
| ROICexc | 9.47% | ||
| ROICexgc | 9.47% | ||
| OM | 38.68% | ||
| PM (TTM) | 27.48% | ||
| GM | 51.67% | ||
| FCFM | 16.62% |
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 | 1.11 | ||
| Debt/FCF | 8.58 | ||
| Debt/EBITDA | 2.71 | ||
| Cap/Depr | 158.78% | ||
| Cap/Sales | 17.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.1% | ||
| Profit Quality | 60.47% | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 2.29 |
F-Score8
WACC9.14%
ROIC/WACC1
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)11.24%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%7.52%
EPS Next Y7.33%
EPS Next 2Y9.48%
EPS Next 3Y9.7%
EPS Next 5Y8.85%
Revenue 1Y (TTM)0.71%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%2.17%
Revenue Next Year1.62%
Revenue Next 2Y2.97%
Revenue Next 3Y3.4%
Revenue Next 5Y3.45%
EBIT growth 1Y22.55%
EBIT growth 3Y0.98%
EBIT growth 5Y2.8%
EBIT Next Year39.89%
EBIT Next 3Y16.95%
EBIT Next 5Y10.3%
FCF growth 1Y1.3%
FCF growth 3Y-78.42%
FCF growth 5Y-56.86%
OCF growth 1Y3.62%
OCF growth 3Y-1.62%
OCF growth 5Y0.81%