NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NSC - US6558441084 - Common Stock
292.05 USD
+1.09 (+0.37%)
419.999 USD
+127.95 (+43.81%)
Taking everything into account, NSC scores 5 out of 10 in our fundamental rating. NSC was compared to 42 industry peers in the Ground Transportation industry. While NSC has a great profitability rating, there are quite some 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.
NSC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
NSC's Return On Assets of 6.64% is fine compared to the rest of the industry. NSC outperforms 76.19% of its industry peers.
NSC has a Return On Equity of 19.54%. This is amongst the best in the industry. NSC outperforms 83.33% of its industry peers.
NSC has a better Return On Invested Capital (8.30%) than 78.57% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NSC is above the industry average of 6.82%.
| 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
Looking at the Profit Margin, with a value of 24.19%, NSC belongs to the top of the industry, outperforming 88.10% of the companies in the same industry.
NSC's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 35.39%, NSC belongs to the top of the industry, outperforming 92.86% of the companies in the same industry.
In the last couple of years the Operating Margin of NSC has remained more or less at the same level.
The Gross Margin of NSC (50.03%) is better 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.
The number of shares outstanding for NSC has been reduced compared to 5 years ago.
The debt/assets ratio for NSC has been reduced compared to a year ago.
2.2 Solvency
NSC has an Altman-Z score of 2.32. 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.
Looking at the Altman-Z score, with a value of 2.32, NSC is in line with its industry, outperforming 50.00% of the companies in the same industry.
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.
NSC's Debt to FCF ratio of 8.14 is fine compared to the rest of the industry. NSC outperforms 71.43% of its industry peers.
A Debt/Equity ratio of 1.09 is on the high side and indicates that NSC has dependencies on debt financing.
The Debt to Equity ratio of NSC (1.09) is worse than 69.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 8.14 | ||
| Altman-Z | 2.32 |
ROIC/WACC0.83
WACC9.98%
2.3 Liquidity
A Current Ratio of 0.86 indicates that NSC may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.86, NSC is doing worse than 69.05% of the companies in the same industry.
A Quick Ratio of 0.78 indicates that NSC may have some problems paying its short term obligations.
NSC has a worse Quick ratio (0.78) than 71.43% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.86 | ||
| Quick Ratio | 0.78 |
3. Growth
3.1 Past
NSC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.93%.
NSC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 2.93% yearly.
Looking at the last year, NSC shows a small growth in Revenue. The Revenue has grown by 0.48% in the last year.
NSC shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 1.42% yearly.
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
The Earnings Per Share is expected to grow by 7.96% on average over the next years.
The Revenue is expected to grow by 3.76% on average over the next years.
EPS Next Y3.45%
EPS Next 2Y4.99%
EPS Next 3Y6.94%
EPS Next 5Y7.96%
Revenue Next Year0.89%
Revenue Next 2Y1.97%
Revenue Next 3Y2.86%
Revenue Next 5Y3.76%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 23.71, NSC is valued on the expensive side.
Based on the Price/Earnings ratio, NSC is valued a bit cheaper than 71.43% of the companies in the same industry.
When comparing the Price/Earnings ratio of NSC to the average of the S&P500 Index (26.84), we can say NSC is valued inline with the index average.
A Price/Forward Earnings ratio of 22.38 indicates a rather expensive valuation of NSC.
69.05% of the companies in the same industry are more expensive than NSC, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of NSC to the average of the S&P500 Index (23.40), we can say NSC is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.71 | ||
| Fwd PE | 22.38 |
4.2 Price Multiples
NSC's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, NSC is valued a bit cheaper than 76.19% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.22 | ||
| EV/EBITDA | 14.18 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of NSC may justify a higher PE ratio.
PEG (NY)6.87
PEG (5Y)8.1
EPS Next 2Y4.99%
EPS Next 3Y6.94%
5. Dividend
5.1 Amount
NSC has a Yearly Dividend Yield of 1.84%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 0.74, NSC pays a better dividend. On top of this NSC pays more dividend than 88.10% of the companies listed in the same industry.
NSC's Dividend Yield is comparable with the S&P500 average which is at 2.00.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.84% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
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.
NSC's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP41.16%
EPS Next 2Y4.99%
EPS Next 3Y6.94%
292.05
+1.09 (+0.37%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners78.43%
Inst Owner Change2.63%
Ins Owners0.02%
Ins Owner Change0.51%
Market Cap65.53B
Revenue(TTM)12.23B
Net Income(TTM)2.96B
Analysts71.11
Price Target315.03 (7.87%)
Short Float %2.86%
Short Ratio4.86
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.84% |
Yearly Dividend5.4
Dividend Growth(5Y)8.41%
DP41.16%
Div Incr Years0
Div Non Decr Years23
Ex-Date
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)-0.92%
PT rev (3m)3.35%
EPS NQ rev (1m)-1.95%
EPS NQ rev (3m)-12.9%
EPS NY rev (1m)-0.47%
EPS NY rev (3m)-3.55%
Revenue NQ rev (1m)-0.52%
Revenue NQ rev (3m)-3.01%
Revenue NY rev (1m)-0.14%
Revenue NY rev (3m)-0.74%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.71 | ||
| Fwd PE | 22.38 | ||
| P/S | 5.36 | ||
| P/FCF | 31.22 | ||
| P/OCF | 15.42 | ||
| P/B | 4.33 | ||
| P/tB | 4.33 | ||
| EV/EBITDA | 14.18 |
EPS(TTM)12.32
EY4.22%
EPS(NY)13.05
Fwd EY4.47%
FCF(TTM)9.35
FCFY3.2%
OCF(TTM)18.94
OCFY6.48%
SpS54.5
BVpS67.48
TBVpS67.48
PEG (NY)6.87
PEG (5Y)8.1
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 | 2.32 |
F-Score8
WACC9.98%
ROIC/WACC0.83
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 5Y7.96%
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 5Y3.76%
EBIT growth 1Y-2.13%
EBIT growth 3Y0.98%
EBIT growth 5Y2.8%
EBIT Next Year36.78%
EBIT Next 3Y15.16%
EBIT Next 5Y11.09%
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 for 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.
What are the PE and PB ratios of NORFOLK SOUTHERN CORP (NSC) stock?
The Price/Earnings (PE) ratio for NORFOLK SOUTHERN CORP (NSC) is 23.71 and the Price/Book (PB) ratio is 4.33.
How sustainable is the dividend of NORFOLK SOUTHERN CORP (NSC) stock?
The dividend rating of NORFOLK SOUTHERN CORP (NSC) is 6 / 10 and the dividend payout ratio is 41.16%.