NYSE:NSC

Stock Analysis Report

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Executive Summary

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


Snowflake Analysis

Established dividend payer with questionable track record.


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

Stable Share Price: NSC's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

6.7%

NSC

2.5%

US Transportation

2.9%

US Market


1 Year Return

-3.7%

NSC

-4.8%

US Transportation

8.9%

US Market

Return vs Industry: NSC exceeded the US Transportation industry which returned -5.5% over the past year.

Return vs Market: NSC underperformed the US Market which returned 9.2% over the past year.


Shareholder returns

NSCIndustryMarket
7 Day6.7%2.5%2.9%
30 Day12.3%16.5%10.6%
90 Day10.2%11.4%5.1%
1 Year-1.8%-3.7%-3.4%-4.8%11.4%8.9%
3 Year69.5%59.8%52.2%44.5%34.3%25.4%
5 Year132.7%108.0%87.9%70.7%60.7%42.7%

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?

20.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: NSC ($192.42) is trading above our estimate of fair value ($150.21)

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


Price To Earnings Ratio

PE vs Industry: NSC is good value based on its PE Ratio (20.7x) compared to the Transportation industry average (22.5x).

PE vs Market: NSC is poor value based on its PE Ratio (20.7x) compared to the US market (16.1x).


Price to Earnings Growth Ratio

PEG Ratio: NSC is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: NSC is overvalued based on its PB Ratio (3.3x) compared to the US Transportation industry average (2.4x).


Next Steps

Future Growth

How is Norfolk Southern forecast to perform in the next 1 to 3 years based on estimates from 21 analysts?

15.0%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: NSC's forecast earnings growth (15% per year) is above the savings rate (2.2%).

Earnings vs Market: NSC's earnings (15% per year) are forecast to grow slower than the US market (22.2% per year).

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

Revenue vs Market: NSC's revenue (5.3% per year) is forecast to grow slower than the US market (8.8% per year).

High Growth Revenue: NSC's revenue (5.3% 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 low in 3 years time (18.2%).


Next Steps

Past Performance

How has Norfolk Southern performed over the past 5 years?

15.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: NSC has high quality earnings.

Growing Profit Margin: NSC's current net profit margins (21.8%) are lower than last year (24%).


Past Earnings Growth Analysis

Earnings Trend: NSC's earnings have grown by 15.7% 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 (-13.1%) over the past year, making it difficult to compare to the Transportation industry average (-11.5%).


Return on Equity

High ROE: NSC's Return on Equity (16.3%) is considered low.


Next Steps

Financial Health

How is Norfolk Southern's financial position?


Financial Position Analysis

Short Term Liabilities: NSC's short term assets ($2.0B) do not cover its short term liabilities ($2.2B).

Long Term Liabilities: NSC's short term assets ($2.0B) do not cover its long term liabilities ($20.3B).


Debt to Equity History and Analysis

Debt Level: NSC's debt to equity ratio (80.2%) is considered high.

Reducing Debt: NSC's debt to equity ratio has increased from 75.8% to 80.2% over the past 5 years.

Debt Coverage: NSC's debt is well covered by operating cash flow (33.2%).

Interest Coverage: NSC's interest payments on its debt are well covered by EBIT (6.6x coverage).


Balance Sheet


Next Steps

Dividend

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

1.95%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: NSC's dividend (1.95%) is higher than the bottom 25% of dividend payers in the US market (1.65%).

High Dividend: NSC's dividend (1.95%) is low compared to the top 25% of dividend payers in the US market (4.39%).


Stability and Growth of Payments

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 (39.6%), 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 (33.4% payout ratio).


Next Steps

Management

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

2.7yrs

Average management tenure


CEO

Jim Squires (58yo)

5yrs

Tenure

US$16,636,674

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 ($USD16.64M) is above average for companies of similar size in the US market ($USD11.58M).

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


Leadership Team

NamePositionTenureCompensationOwnership
James Squires
Chairman5yrsUS$16.64m0.054% $26.5m
Mark George
Executive VP of Finance & CFO0.58yrUS$1.58mno data
Michael Wheeler
Executive VP & COO4.33yrsUS$6.10m0.0085% $4.2m
Alan Shaw
Executive VP & Chief Marketing Officer5.08yrsUS$4.74m0.0090% $4.4m
Fredric Ehlers
VP of Information Technology & Chief Information Officer2.67yrsno datano data
Peter Sharbel
Director of Investor Relationsno datano datano data
Susan Stuart
Vice President of Audit & Compliance3.33yrsno datano data
Vanessa L. Sutherland
Executive Vice President & Chief Legal Officer1.17yrsno data0.00016% $78.9k
Barbara Paul
Vice President of Human Resources0.083yrno datano data
Ann Adams
Executive VP & Chief Transformation Officer1.17yrsno data0.0027% $1.3m

2.7yrs

Average Tenure

51yo

Average Age

Experienced Management: NSC's management team is considered experienced (2.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
James Squires
Chairman5yrsUS$16.64m0.054% $26.5m
Thomas Bell
Independent Director10.42yrsUS$286.77k0.0012% $576.7k
Steven Leer
Lead Independent Director7.08yrsUS$328.60k0.0012% $576.7k
Mitchell Daniels
Independent Director3.58yrsUS$276.27kno data
Michael Lockhart
Independent Director11.75yrsUS$271.77k0.0015% $719.7k
Amy Miles
Independent Director6.42yrsUS$286.77k0.0012% $576.7k
John Thompson
Independent Director7.33yrsUS$271.77k0.0012% $606.3k
Marcela Donadio
Independent Director3.58yrsUS$269.52k0.000010% $4.9k
Jennifer Scanlon
Independent Director2.42yrsUS$285.52k0.00020% $98.6k
Thomas Kelleher
Independent Director1.42yrsUS$259.51kno data

5.5yrs

Average Tenure

65yo

Average Age

Experienced Board: NSC's board of directors are considered experienced (5.5 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

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$49.294b
  • Shares outstanding: 256.18m
  • Website: https://www.norfolksouthern.com

Number of Employees


Location

  • Norfolk Southern Corporation
  • Three Commercial Place
  • Norfolk
  • Virginia
  • 23510-2191
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
NSCNYSE (New York Stock Exchange)YesCommon StockUSUSDJun 1982
NFSDB (Deutsche Boerse AG)YesCommon StockDEEURJun 1982
NFSXTRA (XETRA Trading Platform)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
NFSETLX (Eurotlx)YesCommon StockITEURJun 1982

Biography

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The company transports industrial products, including chemicals, agriculture, and metals and construction materials; and coal, automobiles, and automotive parts. It also transports overseas freight through various Atlantic and Gulf Coast ports; and provides commuter passenger services. As of December 31, 2019, the company operated approximately 19,500 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is based in Norfolk, Virginia. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/06/04 11:50
End of Day Share Price2020/06/03 00:00
Earnings2020/03/31
Annual Earnings2019/12/31


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.