KSU

Kansas City SouthernNYSE:KSU Stock Report

Market Cap

US$25.2b

7D

-0.9%

1Y

51.7%

Updated

18 Sep, 2021

Data

Company Financials +
KSU fundamental analysis
Snowflake Score
Valuation0/6
Future Growth2/6
Past Performance0/6
Financial Health2/6
Dividends1/6

KSU Overview

Kansas City Southern, a transportation holding company, provides domestic and international rail transportation services in North America.

Kansas City Southern Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Kansas City Southern
Historical stock prices
Current Share PriceUS$277.46
52 Week HighUS$171.83
52 Week LowUS$315.39
Beta1.08
1 Month Change-4.68%
3 Month Change-1.48%
1 Year Change51.75%
3 Year Change136.92%
5 Year Change209.49%
Change since IPO3,568.89%

Recent News & Updates

Sep 14

Quick Take On The Kansas City Southern Saga

KSU will likely be acquired. 2 investment proposals from 2 different companies. Regulatory certainty may trump a superior financial offer.

Sep 01

I Remain Positive On Kansas City Southern After STB Ruling

The Surface Transportation Board has rejected Canadian National's proposed voting trust, effectively sinking their acquisition of Kansas City Southern. A merger with Canadian Pacific now seems inevitable. The new CPKC projects to be a strong firm at a reasonable valuation. I continue to recommend Kansas City Southern in anticipation of this combination.

Aug 11

Canadian Pacific Railway Offer Is A Chance To Take Profits On Kansas City Southern Merger Arb Trade

Sentiment against the Canadian National - Kansas City Southern Merger has grown in the past month, as has uncertainty of approval. At $290, KSU has only 2.8% return opportunity to the new offer from Canadian Pacific and 10.8% to the existing Canadian National offer. The growing uncertainty of the CNI deal and small discount to the CP deal are good reasons to take merger arb trade profits in KSU. Long-term investors who want to stay in the industry may find CP a better choice than CNI due to its growth record.

Shareholder Returns

KSUUS TransportationUS Market
7D-0.9%-1.5%-0.6%
1Y51.7%15.6%33.8%

Return vs Industry: KSU exceeded the US Transportation industry which returned 15.6% over the past year.

Return vs Market: KSU exceeded the US Market which returned 33.8% over the past year.

Price Volatility

Is KSU's price volatile compared to industry and market?
KSU volatility
KSU Beta1.08
Industry Beta1.26
Market Beta1

Stable Share Price: KSU is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: KSU's weekly volatility (4%) has been stable over the past year.

About the Company

FoundedEmployeesCEOWebsite
18876,522Pat Ottensmeyerhttps://www.kcsouthern.com

Kansas City Southern, a transportation holding company, provides domestic and international rail transportation services in North America. The company serves a ten-state region in the Midwest and southeast regions of the United States and has the shortest north/south rail route between Kansas City, Missouri, and ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi, and Texas. It operates a commercial corridor of the Mexican railroad system and has its direct rail passageway between Mexico City and Laredo, Texas.

Kansas City Southern Fundamentals Summary

How do Kansas City Southern's earnings and revenue compare to its market cap?
KSU fundamental statistics
Market CapUS$25.24b
Earnings (TTM)US$129.80m
Revenue (TTM)US$2.81b

194.5x

P/E Ratio

9.0x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
KSU income statement (TTM)
RevenueUS$2.81b
Cost of RevenueUS$1.30b
Gross ProfitUS$1.50b
ExpensesUS$1.37b
EarningsUS$129.80m

Last Reported Earnings

Jun 30, 2021

Next Earnings Date

n/a

Earnings per share (EPS)1.42
Gross Margin53.56%
Net Profit Margin4.62%
Debt/Equity Ratio91.8%

How did KSU perform over the long term?

See historical performance and comparison

Dividends

0.8%

Current Dividend Yield

136%

Payout Ratio

Valuation

Is Kansas City Southern undervalued compared to its fair value and its price relative to the market?

194.47x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: KSU ($277.46) is trading above our estimate of fair value ($210.36)

Significantly Below Fair Value: KSU is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: KSU is poor value based on its PE Ratio (194.5x) compared to the US Transportation industry average (17.4x).

PE vs Market: KSU is poor value based on its PE Ratio (194.5x) compared to the US market (17.8x).


Price to Earnings Growth Ratio

PEG Ratio: KSU is poor value based on its PEG Ratio (12.4x)


Price to Book Ratio

PB vs Industry: KSU is overvalued based on its PB Ratio (6.7x) compared to the US Transportation industry average (2.4x).


Future Growth

How is Kansas City Southern forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

15.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KSU's forecast earnings growth (15.7% per year) is above the savings rate (2%).

Earnings vs Market: KSU's earnings (15.7% per year) are forecast to grow faster than the US market (14.9% per year).

High Growth Earnings: KSU's earnings are forecast to grow, but not significantly.

Revenue vs Market: KSU's revenue (5.5% per year) is forecast to grow slower than the US market (9.8% per year).

High Growth Revenue: KSU's revenue (5.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: KSU's Return on Equity is forecast to be low in 3 years time (17.3%).


Past Performance

How has Kansas City Southern performed over the past 5 years?

-3.9%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: KSU has a large one-off loss of $768.2M impacting its June 30 2021 financial results.

Growing Profit Margin: KSU's current net profit margins (4.6%) are lower than last year (20.6%).


Past Earnings Growth Analysis

Earnings Trend: KSU's earnings have declined by 3.9% per year over the past 5 years.

Accelerating Growth: KSU's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: KSU had negative earnings growth (-77.2%) over the past year, making it difficult to compare to the Transportation industry average (48.3%).


Return on Equity

High ROE: KSU's Return on Equity (3.2%) is considered low.


Financial Health

How is Kansas City Southern's financial position?


Financial Position Analysis

Short Term Liabilities: KSU's short term assets ($812.0M) do not cover its short term liabilities ($1.2B).

Long Term Liabilities: KSU's short term assets ($812.0M) do not cover its long term liabilities ($5.0B).


Debt to Equity History and Analysis

Debt Level: KSU's debt to equity ratio (91.8%) is considered high.

Reducing Debt: KSU's debt to equity ratio has increased from 59% to 91.8% over the past 5 years.

Debt Coverage: KSU's debt is well covered by operating cash flow (28.1%).

Interest Coverage: KSU's interest payments on its debt are well covered by EBIT (7.2x coverage).


Balance Sheet


Dividend

What is Kansas City Southern current dividend yield, its reliability and sustainability?

0.78%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: KSU's dividend (0.78%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.33%).

High Dividend: KSU's dividend (0.78%) is low compared to the top 25% of dividend payers in the US market (3.6%).


Stability and Growth of Payments

Stable Dividend: Whilst dividend payments have been stable, KSU has been paying a dividend for less than 10 years.

Growing Dividend: KSU's dividend payments have increased, but the company has only paid a dividend for 9 years.


Current Payout to Shareholders

Dividend Coverage: With its high payout ratio (135.6%), KSU's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: KSU's dividends in 3 years are forecast to be well covered by earnings (21.1% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

3.8yrs

Average management tenure


CEO

Pat Ottensmeyer (63 yo)

5.17yrs

Tenure

US$7,135,912

Compensation

Mr. Patrick J. Ottensmeyer, also known as Pat, has been the President of Kansas City Southern since March 1, 2015 and its Chief Executive Officer and Director since July 1, 2016. Mr. Ottensmeyer served as...


CEO Compensation Analysis

Compensation vs Market: Pat's total compensation ($USD7.14M) is below average for companies of similar size in the US market ($USD11.36M).

Compensation vs Earnings: Pat's compensation has been consistent with company performance over the past year.


Leadership Team

Experienced Management: KSU's management team is considered experienced (3.8 years average tenure).


Board Members

Experienced Board: KSU's board of directors are considered experienced (5.2 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Kansas City Southern's employee growth, exchange listings and data sources


Key Information

  • Name: Kansas City Southern
  • Ticker: KSU
  • Exchange: NYSE
  • Founded: 1887
  • Industry: Railroads
  • Sector: Transportation
  • Market Cap: US$25.242b
  • Shares outstanding: 90.98m
  • Website: https://www.kcsouthern.com

Number of Employees


Location

  • Kansas City Southern
  • 427 West 12th Street
  • Kansas City
  • Missouri
  • 64105
  • United States

Listings


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2021/09/18 22:02
End of Day Share Price2021/09/17 00:00
Earnings2021/06/30
Annual Earnings2020/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.