Norfolk Southern Corp. (NSC), Union Pacific Corporation (UNP): The Big Three Is Becoming a Two-Person Race

Maybe the worst number of all
I know that a company can’t control its stock price, but considering Norfolk Southern’s underperformance above, the fact that it offers the worst value of the bunch doesn’t help matters. The easiest way to see this comparison is side-by-side:

As you can see, the only thing that Norfolk Southern Corp. (NYSE:NSC) has going for it is the company’s dividend yield is slightly higher than CSX. However, Norfolk is projected to have the lowest growth rate, though it sells for nearly the same P/E ratio as CSX.

Unfortunately for Norfolk investors, the numbers don’t lie. The company is heavily reliant on coal and is underperforming its peers in this industry. Norfolk has the worst operating margin in its class, the worst growth rate, and an only slightly cheaper forward P/E ratio than CSX. Given that Union Pacific is slated to outgrow each of its peers, it deserves a higher P/E ratio. CSX seems to offer a slightly better value than Norfolk Southern Corp. (NYSE:NSC), and is improving its operations.

This leaves Norfolk at the back of this three person race. Given that the stock is trading near its 52 week high, I would suggest investors take their profits now. If you don’t, you might not be “pleased” with the results.

The article How Is This Company Pleased With Its Performance? originally appeared on Fool.com and is written by Chad Henage.

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