NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:NSC - US6558441084 - Common Stock
291.15 USD
+3.23 (+1.12%)
291.15 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 correct valuation and a medium growth rate.
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.
NSC had positive earnings in each of the past 5 years.
NSC had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 6.64%, NSC is doing good in the industry, outperforming 73.81% of the companies in the same industry.
NSC has a better Return On Equity (19.54%) than 83.33% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.30%, NSC is in the better half of the industry, outperforming 78.57% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years 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
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.
NSC has a Operating Margin of 35.39%. This is amongst the best in the industry. NSC outperforms 92.86% of its industry peers.
NSC's Operating Margin has been stable in the last couple of years.
NSC's Gross Margin of 50.03% is fine compared to the rest of the industry. NSC outperforms 61.90% of its industry peers.
NSC's Gross Margin has improved in the last couple of years.
| 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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 2.30. 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's Altman-Z score of 2.30 is in line compared to the rest of the industry. NSC outperforms 50.00% of 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.
NSC has a Debt to FCF ratio of 8.14. This is in the better half of the industry: NSC outperforms 71.43% of its industry peers.
NSC has a Debt/Equity ratio of 1.09. This is a high value indicating a heavy dependency on external financing.
With a Debt to Equity ratio value of 1.09, NSC is not doing good in the industry: 69.05% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.09 | ||
| Debt/FCF | 8.14 | ||
| Altman-Z | 2.3 |
ROIC/WACC0.82
WACC10.08%
2.3 Liquidity
A Current Ratio of 0.86 indicates that NSC may have some problems paying 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.
Looking at the Quick ratio, with a value of 0.78, NSC is doing worse than 69.05% of the companies in the same industry.
| 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%.
Measured over the past 5 years, NSC shows a small growth in Earnings Per Share. The EPS has been growing by 2.93% on average per year.
The Revenue has been growing slightly by 0.48% in the past year.
The Revenue has been growing slightly by 1.42% on average over the past years.
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.
NSC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.76% yearly.
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
Based on the Price/Earnings ratio of 23.63, 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.
NSC is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.17, which is the current average of the S&P500 Index.
NSC is valuated rather expensively with a Price/Forward Earnings ratio of 22.31.
NSC's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. NSC is cheaper than 69.05% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.79. NSC is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.63 | ||
| Fwd PE | 22.31 |
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 the industry average as 76.19% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.12 | ||
| EV/EBITDA | 14.06 |
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)6.85
PEG (5Y)8.08
EPS Next 2Y4.99%
EPS Next 3Y6.94%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.87%, NSC has a reasonable but not impressive dividend return.
NSC's Dividend Yield is rather good when compared to the industry average which is at 0.76. NSC pays more dividend than 85.71% of the companies in the same industry.
NSC's Dividend Yield is comparable with the S&P500 average which is at 1.94.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
5.2 History
The dividend of NSC is nicely growing with an annual growth rate of 8.41%!
NSC has paid a dividend for at least 10 years, which is 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
NSC pays out 41.16% of its income as dividend. 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%
291.15
+3.23 (+1.12%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners78.29%
Inst Owner Change0%
Ins Owners0.02%
Ins Owner Change0.51%
Market Cap65.33B
Revenue(TTM)12.23B
Net Income(TTM)2.96B
Analysts71.11
Price Target315.03 (8.2%)
Short Float %3.13%
Short Ratio5.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.87% |
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)-0.92%
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 | 23.63 | ||
| Fwd PE | 22.31 | ||
| P/S | 5.34 | ||
| P/FCF | 31.12 | ||
| P/OCF | 15.38 | ||
| P/B | 4.31 | ||
| P/tB | 4.31 | ||
| EV/EBITDA | 14.06 |
EPS(TTM)12.32
EY4.23%
EPS(NY)13.05
Fwd EY4.48%
FCF(TTM)9.35
FCFY3.21%
OCF(TTM)18.94
OCFY6.5%
SpS54.5
BVpS67.48
TBVpS67.48
PEG (NY)6.85
PEG (5Y)8.08
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
WACC10.08%
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 5Y7.96%
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 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%.