NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NSC - US6558441084 - Common Stock
287.21 USD
-2.51 (-0.87%)
287.21 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to NSC. NSC was compared to 42 industry peers in the Ground Transportation industry. NSC scores excellent on profitability, but there are concerns on its financial health. NSC has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
NSC had positive earnings in the past year.
In the past year NSC had a positive cash flow from operations.
Each year in the past 5 years NSC has been profitable.
In the past 5 years NSC always reported a positive cash flow from operatings.
1.2 Ratios
NSC has a better Return On Assets (6.64%) than 73.81% of its industry peers.
The Return On Equity of NSC (19.54%) is better than 83.33% of its industry peers.
The Return On Invested Capital of NSC (8.30%) is better than 78.57% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for NSC is above the industry average of 6.93%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.64% | ||
| ROE | 19.54% | ||
| ROIC | 8.3% |
ROA(3y)6.26%
ROA(5y)6.38%
ROE(3y)19.41%
ROE(5y)18.77%
ROIC(3y)9.15%
ROIC(5y)8.93%
1.3 Margins
NSC's Profit Margin of 24.19% is amongst the best of the industry. NSC outperforms 88.10% of its industry peers.
NSC's Profit Margin has declined in the last couple of years.
NSC's Operating Margin of 35.39% is amongst the best of the industry. NSC outperforms 92.86% of its industry peers.
NSC's Operating Margin has been stable in the last couple of years.
NSC has a better Gross Margin (50.03%) than 61.90% of its industry peers.
In the last couple of years the Gross Margin of NSC has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 35.39% | ||
| PM (TTM) | 24.19% | ||
| GM | 50.03% |
OM growth 3Y-1.82%
OM growth 5Y1.35%
PM growth 3Y-7.11%
PM growth 5Y-2.12%
GM growth 3Y-0.74%
GM growth 5Y1.7%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so NSC is destroying value.
The number of shares outstanding for NSC has been increased compared to 1 year ago.
NSC has less shares outstanding than it did 5 years ago.
NSC has a better debt/assets ratio than last year.
2.2 Solvency
NSC has an Altman-Z score of 2.30. This is not the best score and indicates that NSC is in the grey zone with still only limited risk for bankruptcy at the moment.
NSC has a Altman-Z score (2.30) which is in line with its industry peers.
The Debt to FCF ratio of NSC is 8.14, which is on the high side as it means it would take NSC, 8.14 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 8.14, NSC is doing good in the industry, outperforming 71.43% of the companies in the same industry.
A Debt/Equity ratio of 1.09 is on the high side and indicates that NSC has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.09, NSC is doing worse than 69.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 8.14 | ||
| Altman-Z | 2.3 |
ROIC/WACC0.82
WACC10.1%
2.3 Liquidity
NSC has a Current Ratio of 0.86. This is a bad value and indicates that NSC is not financially healthy enough and could expect problems in meeting its short term obligations.
NSC has a worse Current ratio (0.86) than 69.05% of its industry peers.
A Quick Ratio of 0.78 indicates that NSC may have some problems paying its short term obligations.
The Quick ratio of NSC (0.78) is worse than 69.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.93% over the past year.
NSC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.93% yearly.
The Revenue has been growing slightly by 0.48% in the past year.
Measured over the past years, NSC shows a small growth in Revenue. The Revenue has been growing by 1.42% on average per year.
EPS 1Y (TTM)5.93%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%1.54%
Revenue 1Y (TTM)0.48%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%1.7%
3.2 Future
Based on estimates for the next years, NSC will show a small growth in Earnings Per Share. The EPS will grow by 7.56% on average per year.
NSC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.64% yearly.
EPS Next Y3.45%
EPS Next 2Y4.99%
EPS Next 3Y6.94%
EPS Next 5Y7.56%
Revenue Next Year0.89%
Revenue Next 2Y1.97%
Revenue Next 3Y2.86%
Revenue Next 5Y3.64%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 23.31, the valuation of NSC can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of NSC indicates a somewhat cheap valuation: NSC is cheaper than 71.43% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 27.19, NSC is valued at the same level.
NSC is valuated rather expensively with a Price/Forward Earnings ratio of 22.01.
Based on the Price/Forward Earnings ratio, NSC is valued a bit cheaper than 69.05% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.92, NSC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.31 | ||
| Fwd PE | 22.01 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as NSC.
76.19% of the companies in the same industry are more expensive than NSC, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.7 | ||
| EV/EBITDA | 14.03 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
NSC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)6.76
PEG (5Y)7.97
EPS Next 2Y4.99%
EPS Next 3Y6.94%
5. Dividend
5.1 Amount
NSC has a Yearly Dividend Yield of 1.86%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.72, NSC pays a better dividend. On top of this NSC pays more dividend than 85.71% of the companies listed in the same industry.
NSC's Dividend Yield is comparable with the S&P500 average which is at 1.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
5.2 History
The dividend of NSC is nicely growing with an annual growth rate of 8.41%!
NSC has been paying a dividend for at least 10 years, so it has a reliable track record.
NSC has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)8.41%
Div Incr Years0
Div Non Decr Years23
5.3 Sustainability
41.16% of the earnings are spent on dividend by NSC. This is a bit on the high side, but may be sustainable.
The dividend of NSC is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP41.16%
EPS Next 2Y4.99%
EPS Next 3Y6.94%
287.21
-2.51 (-0.87%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners78.29%
Inst Owner Change-0.37%
Ins Owners0.02%
Ins Owner Change0.51%
Market Cap64.45B
Revenue(TTM)12.23B
Net Income(TTM)2.96B
Analysts70.37
Price Target315.03 (9.69%)
Short Float %3.13%
Short Ratio5.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.86% |
Yearly Dividend5.4
Dividend Growth(5Y)8.41%
DP41.16%
Div Incr Years0
Div Non Decr Years23
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.55%
Min EPS beat(2)-1.39%
Max EPS beat(2)2.49%
EPS beat(4)2
Avg EPS beat(4)0.51%
Min EPS beat(4)-1.39%
Max EPS beat(4)2.49%
EPS beat(8)4
Avg EPS beat(8)0.52%
EPS beat(12)5
Avg EPS beat(12)-0.06%
EPS beat(16)7
Avg EPS beat(16)0.66%
Revenue beat(2)0
Avg Revenue beat(2)-1.4%
Min Revenue beat(2)-1.61%
Max Revenue beat(2)-1.18%
Revenue beat(4)0
Avg Revenue beat(4)-1.06%
Min Revenue beat(4)-1.61%
Max Revenue beat(4)-0.43%
Revenue beat(8)0
Avg Revenue beat(8)-1.37%
Revenue beat(12)1
Avg Revenue beat(12)-1.29%
Revenue beat(16)5
Avg Revenue beat(16)-0.53%
PT rev (1m)-0.63%
PT rev (3m)2.72%
EPS NQ rev (1m)-1.29%
EPS NQ rev (3m)-12.69%
EPS NY rev (1m)-0.35%
EPS NY rev (3m)-3.55%
Revenue NQ rev (1m)-0.33%
Revenue NQ rev (3m)-2.92%
Revenue NY rev (1m)-0.11%
Revenue NY rev (3m)-0.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.31 | ||
| Fwd PE | 22.01 | ||
| P/S | 5.27 | ||
| P/FCF | 30.7 | ||
| P/OCF | 15.17 | ||
| P/B | 4.26 | ||
| P/tB | 4.26 | ||
| EV/EBITDA | 14.03 |
EPS(TTM)12.32
EY4.29%
EPS(NY)13.05
Fwd EY4.54%
FCF(TTM)9.35
FCFY3.26%
OCF(TTM)18.94
OCFY6.59%
SpS54.5
BVpS67.48
TBVpS67.48
PEG (NY)6.76
PEG (5Y)7.97
Graham Number136.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.64% | ||
| ROE | 19.54% | ||
| ROCE | 10.54% | ||
| ROIC | 8.3% | ||
| ROICexc | 8.6% | ||
| ROICexgc | 8.6% | ||
| OM | 35.39% | ||
| PM (TTM) | 24.19% | ||
| GM | 50.03% | ||
| FCFM | 17.16% |
ROA(3y)6.26%
ROA(5y)6.38%
ROE(3y)19.41%
ROE(5y)18.77%
ROIC(3y)9.15%
ROIC(5y)8.93%
ROICexc(3y)9.43%
ROICexc(5y)9.19%
ROICexgc(3y)9.43%
ROICexgc(5y)9.19%
ROCE(3y)11.62%
ROCE(5y)11.33%
ROICexgc growth 3Y-2.05%
ROICexgc growth 5Y0.88%
ROICexc growth 3Y-2.05%
ROICexc growth 5Y0.88%
OM growth 3Y-1.82%
OM growth 5Y1.35%
PM growth 3Y-7.11%
PM growth 5Y-2.12%
GM growth 3Y-0.74%
GM growth 5Y1.7%
F-Score8
Asset Turnover0.27
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 8.14 | ||
| Debt/EBITDA | 2.89 | ||
| Cap/Depr | 155.57% | ||
| Cap/Sales | 17.58% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.41% | ||
| Profit Quality | 70.94% | ||
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.78 | ||
| Altman-Z | 2.3 |
F-Score8
WACC10.1%
ROIC/WACC0.82
Cap/Depr(3y)212.64%
Cap/Depr(5y)178.37%
Cap/Sales(3y)22.6%
Cap/Sales(5y)19.25%
Profit Quality(3y)38.72%
Profit Quality(5y)63.1%
High Growth Momentum
Growth
EPS 1Y (TTM)5.93%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%1.54%
EPS Next Y3.45%
EPS Next 2Y4.99%
EPS Next 3Y6.94%
EPS Next 5Y7.56%
Revenue 1Y (TTM)0.48%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%1.7%
Revenue Next Year0.89%
Revenue Next 2Y1.97%
Revenue Next 3Y2.86%
Revenue Next 5Y3.64%
EBIT growth 1Y-2.13%
EBIT growth 3Y0.98%
EBIT growth 5Y2.8%
EBIT Next Year36.78%
EBIT Next 3Y15.16%
EBIT Next 5Y10.97%
FCF growth 1Y83.8%
FCF growth 3Y-78.42%
FCF growth 5Y-56.86%
OCF growth 1Y28.6%
OCF growth 3Y-1.62%
OCF growth 5Y0.81%
NORFOLK SOUTHERN CORP / NSC FAQ
What is the ChartMill fundamental rating of NORFOLK SOUTHERN CORP (NSC) stock?
ChartMill assigns a fundamental rating of 5 / 10 to NSC.
What is the valuation status of NORFOLK SOUTHERN CORP (NSC) stock?
ChartMill assigns a valuation rating of 4 / 10 to NORFOLK SOUTHERN CORP (NSC). This can be considered as Fairly Valued.
What is the profitability of NSC stock?
NORFOLK SOUTHERN CORP (NSC) has a profitability rating of 7 / 10.
Can you provide the expected EPS growth for NSC stock?
The Earnings per Share (EPS) of NORFOLK SOUTHERN CORP (NSC) is expected to grow by 3.45% in the next year.
Is the dividend of NORFOLK SOUTHERN CORP sustainable?
The dividend rating of NORFOLK SOUTHERN CORP (NSC) is 6 / 10 and the dividend payout ratio is 41.16%.