NYSE:KSU

Stock Analysis Report

Executive Summary

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

Snowflake

Fundamentals

Mediocre balance sheet with limited growth.


Similar Companies

Share Price & News

How has Kansas City Southern's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

8.8%

KSU

2.1%

US Transportation

0.4%

US Market


1 Year Return

36.9%

KSU

9.8%

US Transportation

6.9%

US Market

Return vs Industry: KSU exceeded the US Transportation industry which returned 9.8% over the past year.

Return vs Market: KSU exceeded the US Market which returned 6.9% over the past year.


Shareholder returns

KSUIndustryMarket
7 Day8.8%2.1%0.4%
30 Day9.3%-2.3%-1.2%
90 Day17.7%-8.4%-0.4%
1 Year38.6%36.9%11.7%9.8%9.3%6.9%
3 Year67.4%60.8%82.2%73.6%45.8%36.4%
5 Year29.3%20.8%48.4%36.8%62.9%45.1%

Price Volatility Vs. Market

How volatile is Kansas City Southern's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

25.42x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Undervalued: KSU ($145.25) is trading above our estimate of fair value ($108.12)

Significantly Undervalued: 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 (25.4x) compared to the Transportation industry average (17.7x).

PE vs Market: KSU is poor value based on its PE Ratio (25.4x) compared to the US market (17.6x).


Price to Earnings Growth Ratio

Low PEG Ratio: KSU is poor value based on its PEG Ratio (1.6x)


Price to Book Ratio

PB vs Industry: KSU is overvalued based on its PB Ratio (3x) compared to the US Transportation industry average (2.1x).


Next Steps

Future Growth

How is Kansas City Southern forecast to perform in the next 1 to 3 years based on estimates from 13 analysts?

16.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: KSU's forecast earnings growth (16.3% per year) is above the savings rate (2.7%).

Earnings vs Market: KSU's earnings (16.3% per year) are forecast to grow faster than the US market (14.5% per year).

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

Revenue vs Market: KSU's revenue (5.1% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: KSU's revenue (5.1% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: KSU's Return on Equity is forecast to be low in 3 years time (15.1%).


Next Steps

Past Performance

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

10.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: KSU's earnings have grown by 10.4% 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 (-43.7%) over the past year, making it difficult to compare to the Transportation industry average (-43.5%).


Return on Equity

High ROE: KSU's Return on Equity (11.2%) is considered low.


Return on Assets

ROA vs Industry: KSU's Return on Assets is below or equal to the Transportation industry average last year.


Return on Capital Employed

ROCE Improving: KSU has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Kansas City Southern's financial position?


Financial Position Analysis

Short Term Liabilities: KSU's short term assets ($609.7M) do not cover its short term liabilities ($767.3M)

Long Term Liabilities: KSU's short term assets (609.7M) do not cover its long term liabilities (3.7B)


Debt to Equity History and Analysis

Debt Level: KSU's debt to equity ratio (51.9%) is considered high

Reducing Debt: KSU's debt to equity ratio has reduced from 57.2% to 51.9% over the past 5 years.

Debt Coverage: KSU's debt is well covered by operating cash flow (39.7%).

Interest Coverage: KSU's interest payments on its debt are well covered by EBIT (9.2x coverage).


Balance Sheet

Inventory Level: KSU has a high level of physical assets or inventory.

Debt Coverage by Assets: KSU's debt is not covered by short term assets (assets are 0.2x debt).


Next Steps

Dividend

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

0.99%

Current Dividend Yield


Dividend Yield vs Market

company1.0%marketbottom25%1.4%markettop25%3.7%industryaverage1.8%forecastin3Years1.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: KSU's dividend (0.99%) isn’t notable compared to the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: KSU's dividend (0.99%) is low compared to the top 25% of dividend payers in the US market (3.73%).

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 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (25.2%), KSU's dividend payments are 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 (16.3% payout ratio).


Next Steps

Management

What is the CEO of Kansas City Southern's salary, the management and board of directors tenure and is there insider trading?

2.8yrs

Average management tenure


CEO

Pat Ottensmeyer (61yo)

3.3yrs

Tenure

US$5,523,327

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 ($USD5.52M) is below average for companies of similar size in the US market ($USD11.18M).

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


Management Age and Tenure

2.8yrs

Average Tenure

55.5yo

Average Age

Experienced Management: KSU's management team is considered experienced (2.8 years average tenure).


Board Age and Tenure

3.3yrs

Average Tenure

64yo

Average Age

Experienced Board: KSU's board of directors are considered experienced (3.3 years average tenure).


Insider Trading

Insider Buying: KSU insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$124,50029 Jul 19
Lu Córdova
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$124.50
SellUS$105,11623 Jul 19
Adam Godderz
EntityIndividual
Shares840
Max PriceUS$125.14
SellUS$312,60823 Jul 19
Robert Druten
EntityIndividual
Role
Chairman of the Board
Independent Chairman
Shares2,500
Max PriceUS$125.04
SellUS$116,84806 Jun 19
Lu Córdova
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$116.87
SellUS$441,18309 May 19
Michael Naatz
EntityIndividual
Role
Head of Marketing
Executive VP & Chief Marketing Officer
Shares3,601
Max PriceUS$122.52
SellUS$123,06802 May 19
Suzanne Grafton
EntityIndividual
Role
Chief Accounting Officer
Chief Accounting Officer & VP
Shares1,000
Max PriceUS$123.07
BuyUS$102,68029 Oct 18
Henry Maier
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares1,000
Max PriceUS$102.68

Ownership Breakdown


Management Team

  • Warren Erdman (60yo)

    Executive Vice President of Administration & Corporate Affairs

    • Tenure: 9.5yrs
    • Compensation: US$1.27m
  • Pat Ottensmeyer (61yo)

    CEO, President & Director

    • Tenure: 3.3yrs
    • Compensation: US$5.52m
  • Lora Cheatum (62yo)

    Senior Vice President of Human Resources

    • Tenure: 5yrs
  • Brian Hancock (53yo)

    Executive VP & Chief Innovation Officer

    • Tenure: 1yrs
    • Compensation: US$1.58m
  • Mike Naatz (53yo)

    Executive VP & Chief Marketing Officer

    • Tenure: 1yrs
  • Mike Upchurch (58yo)

    CFO & Executive VP

    • Tenure: 11yrs
    • Compensation: US$1.70m
  • Rodrigo Leon

    Vice President of Sales & Marketing Automotive

    • Tenure: 0.08yrs
  • Jeff Songer (49yo)

    COO & Executive VP

    • Tenure: 3.6yrs
    • Compensation: US$1.68m
  • Suzie Grafton (43yo)

    Chief Accounting Officer & VP

    • Tenure: 2.3yrs
  • Ashley Thorne

    Vice President of Investor Relations

    • Tenure: 1.8yrs

Board Members

  • Tom McDonnell (73yo)

    Presiding Director

    • Tenure: 0yrs
    • Compensation: US$240.03k
  • Bob Druten (71yo)

    Independent Chairman

    • Tenure: 0yrs
    • Compensation: US$350.03k
  • Pat Ottensmeyer (61yo)

    CEO, President & Director

    • Tenure: 3.3yrs
    • Compensation: US$5.52m
  • Lu Córdova (64yo)

    Independent Director

    • Tenure: 9.4yrs
    • Compensation: US$231.94k
  • Mitch Krebs (47yo)

    Independent Director

    • Tenure: 2.4yrs
    • Compensation: US$200.07k
  • Lydia Beebe (66yo)

    Independent Director

    • Tenure: 2.4yrs
    • Compensation: US$230.07k
  • David Francisco Garza Santos (57yo)

    Independent Director

    • Tenure: 3.7yrs
    • Compensation: US$190.07k
  • Antonio O. Garza (59yo)

    Independent Director

    • Tenure: 9.4yrs
    • Compensation: US$257.07k
  • Henry Maier (65yo)

    Independent Director

    • Tenure: 2.4yrs
    • Compensation: US$200.07k

Company Information

Kansas City Southern's company bio, 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$14.512b
  • Shares outstanding: 99.91m
  • Website: https://www.kcsouthern.com

Number of Employees


Location

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

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
KSUNYSE (New York Stock Exchange)YesCommon StockUSUSDMar 1964
KCYDB (Deutsche Boerse AG)YesCommon StockDEEURMar 1964
KSU *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNMar 1964
0JQ4LSE (London Stock Exchange)YesCommon StockGBUSDMar 1964
KSU.PRNYSE (New York Stock Exchange)PFD 4%USUSDDec 1972

Biography

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 ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/18 23:37
End of Day Share Price2019/10/18 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


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.