NYSE:NSC

Stock Analysis Report

Executive Summary

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods.

Snowflake

Fundamentals

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

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


Latest Share Price and Events


Market Performance


7 Day Return

2.1%

NSC

4.3%

US Transportation

0.07%

US Market


1 Year Return

15.4%

NSC

17.7%

US Transportation

8.9%

US Market

Return vs Industry: NSC exceeded the US Transportation industry which returned 17.7% over the past year.

Return vs Market: NSC exceeded the US Market which returned 8.9% over the past year.


Shareholder returns

NSCIndustryMarket
7 Day2.1%4.3%0.07%
30 Day3.0%3.0%-0.3%
90 Day-1.4%-4.1%-1.6%
1 Year17.7%15.4%19.7%17.7%11.3%8.9%
3 Year118.2%105.3%89.4%80.4%46.3%36.8%
5 Year87.2%67.0%52.5%40.5%62.1%44.3%

Price Volatility Vs. Market

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


Simply Wall St News

Valuation

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

17.82x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NSC ($184.87) is trading above our estimate of fair value ($133.3)

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


Price To Earnings Ratio

PE vs Industry: NSC is poor value based on its PE Ratio (17.8x) compared to the Transportation industry average (18x).

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


Price to Earnings Growth Ratio

PEG Ratio: NSC is poor value based on its PEG Ratio (2.6x)


Price to Book Ratio

PB vs Industry: NSC is overvalued based on its PB Ratio (3.2x) compared to the US Transportation industry average (2.3x).


Next Steps

Future Growth

How is Norfolk Southern forecast to perform in the next 1 to 3 years based on estimates from 18 analysts?

6.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NSC's forecast earnings growth (6.7% per year) is above the savings rate (2.7%).

Earnings vs Market: NSC's earnings (6.7% per year) are forecast to grow slower than the US market (14.5% per year).

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

Revenue vs Market: NSC's revenue (3.2% per year) is forecast to grow slower than the US market (7.2% per year).

High Growth Revenue: NSC's revenue (3.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: NSC's Return on Equity is forecast to be high in 3 years time (20%)


Next Steps

Past Performance

How has Norfolk Southern performed over the past 5 years?

21.3%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: NSC's earnings have grown significantly by 21.3% per year over the past 5 years.

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

Earnings vs Industry: NSC had negative earnings growth (-51.2%) over the past year, making it difficult to compare to the Transportation industry average (-43.6%).


Return on Equity

High ROE: NSC's Return on Equity (18.3%) is considered low.


Return on Assets

ROA vs Industry: NSC has a higher Return on Assets than the Transportation industry average last year.


Return on Capital Employed

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


Next Steps

Financial Health

How is Norfolk Southern's financial position?


Financial Position Analysis

Short Term Liabilities: NSC's short term assets ($1.9B) do not cover its short term liabilities ($2.5B)

Long Term Liabilities: NSC's short term assets (1.9B) do not cover its long term liabilities (19.4B)


Debt to Equity History and Analysis

Debt Level: NSC's debt to equity ratio (76.8%) is considered high

Reducing Debt: NSC's debt to equity ratio has reduced from 77.6% to 76.8% over the past 5 years.

Debt Coverage: NSC's debt is well covered by operating cash flow (32.8%).

Interest Coverage: NSC's interest payments on its debt are well covered by EBIT (7.1x coverage).


Balance Sheet

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

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


Next Steps

Dividend

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

2.03%

Current Dividend Yield


Dividend Yield vs Market

company2.0%marketbottom25%1.4%markettop25%3.7%industryaverage1.7%forecastin3Years2.0%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: NSC's dividend (2.03%) is higher than the bottom 25% of dividend payers in the US market (1.45%).

High Dividend: NSC's dividend (2.03%) is low compared to the top 25% of dividend payers in the US market (3.68%).

Stable Dividend: NSC's dividends per share have been stable in the past 10 years.

Growing Dividend: NSC's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (32%), NSC's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: NSC's dividends in 3 years are forecast to be well covered by earnings (28.9% payout ratio).


Next Steps

Management

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

2.2yrs

Average management tenure


CEO

Jim Squires (58yo)

4.3yrs

Tenure

US$14,271,985

Compensation

Mr. James A. Squires, also known as Jim, has been the Chief Executive Officer of Norfolk Southern Corporation since June 1, 2015, has been its President since June 1, 2013 and has been its Chairman since O ...


CEO Compensation Analysis

Compensation vs. Market: Jim's total compensation ($USD14.27M) is about average for companies of similar size in the US market ($USD11.18M).

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


Management Age and Tenure

2.2yrs

Average Tenure

56yo

Average Age

Experienced Management: NSC's management team is considered experienced (2.2 years average tenure).


Board Age and Tenure

6.1yrs

Average Tenure

67yo

Average Age

Experienced Board: NSC's board of directors are considered experienced (6.1 years average tenure).


Insider Trading

Insider Buying: NSC insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

BuyUS$100,54630 Jul 19
Jennifer Scanlon
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares525
Max PriceUS$191.52
SellUS$619,05123 May 19
James Squires
EntityIndividual
Role
Chief Executive Officer
Chairman
Shares3,024
Max PriceUS$204.80
SellUS$511,42006 May 19
Michael Wheeler
EntityIndividual
Role
Chief Operating Officer
Executive VP of Government Relations & COO
Shares2,500
Max PriceUS$204.57
SellUS$94,11715 Feb 19
Jason Zampi
EntityIndividual
Shares519
Max PriceUS$181.34
SellUS$540,70414 Feb 19
Michael Wheeler
EntityIndividual
Role
Chief Operating Officer
Executive VP of Government Relations & COO
Shares3,000
Max PriceUS$180.23
SellUS$138,21608 Nov 18
Michael Wheeler
EntityIndividual
Role
Chief Operating Officer
Executive VP of Government Relations & COO
Shares801
Max PriceUS$172.55

Ownership Breakdown


Management Team

  • Jim Squires (58yo)

    Chairman

    • Tenure: 4.3yrs
    • Compensation: US$14.27m
  • Cindy Earhart (57yo)

    Executive VP & CFO

    • Tenure: 2.2yrs
    • Compensation: US$4.51m
  • Fred Ehlers

    VP of Information Technology & Chief Information Officer

    • Tenure: 2yrs
  • Mike Wheeler (56yo)

    Executive VP of Government Relations & COO

    • Tenure: 3.7yrs
    • Compensation: US$4.86m
  • Alan Shaw (51yo)

    Executive VP & Chief Marketing Officer

    • Tenure: 4.4yrs
    • Compensation: US$3.93m
  • John Scheib (47yo)

    Executive VP & Chief Strategy Officer

    • Tenure: 0.5yrs
    • Compensation: US$2.66m
  • Susan Stuart

    Vice President of Audit & Compliance

    • Tenure: 2.7yrs
  • Vanessa L. Sutherland

    Senior VP of Government Relations & Chief Legal Officer

    • Tenure: 0.5yrs
  • Peter Sharbel

    Director of Investor Relations

    • Tenure: 0yrs
  • Anne Melaragni

    Vice President of Human Resources

    • Tenure: 0.3yrs

Board Members

  • Tom Bell (69yo)

    Independent Director

    • Tenure: 9.8yrs
    • Compensation: US$281.67k
  • Dan Carp (71yo)

    Independent Director

    • Tenure: 13.8yrs
    • Compensation: US$276.67k
  • Steve Leer (66yo)

    Lead Independent Director

    • Tenure: 6.4yrs
    • Compensation: US$310.21k
  • Mitch Daniels (70yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$251.67k
  • Michael Lockhart (70yo)

    Independent Director

    • Tenure: 11.1yrs
    • Compensation: US$266.67k
  • Amy Miles (52yo)

    Independent Director

    • Tenure: 5.8yrs
    • Compensation: US$278.97k
  • Jim Squires (58yo)

    Chairman

    • Tenure: 4.3yrs
    • Compensation: US$14.27m
  • John Thompson (68yo)

    Independent Director

    • Tenure: 6.7yrs
    • Compensation: US$241.67k
  • Marcela Donadio (64yo)

    Independent Director

    • Tenure: 2.9yrs
    • Compensation: US$245.42k
  • Jenny Scanlon (52yo)

    Independent Director

    • Tenure: 1.8yrs
    • Compensation: US$246.67k

Company Information

Norfolk Southern Corporation's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Norfolk Southern Corporation
  • Ticker: NSC
  • Exchange: NYSE
  • Founded: 1883
  • Industry: Railroads
  • Sector: Transportation
  • Market Cap: US$48.204b
  • Shares outstanding: 260.75m
  • Website: https://www.nscorp.com

Number of Employees


Location

  • Norfolk Southern Corporation
  • Three Commercial Place
  • Norfolk
  • Virginia
  • 23510
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NSCNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1982
NFSDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1982
0K8MLSE (London Stock Exchange)YesCommon StockGBUSDJun 1982
NSC *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNJun 1982
NSCOWBAG (Wiener Boerse AG)YesCommon StockATEURJun 1982

Biography

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods. The company transports industrial products, inc ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/23 23:42
End of Day Share Price2019/10/23 00:00
Earnings2019/06/30
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.