NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis
NYSE:NSC - New York Stock Exchange, Inc. - US6558441084 - Common Stock - Currency: USD
Taking everything into account, NSC scores 5 out of 10 in our fundamental rating. NSC was compared to 39 industry peers in the Ground Transportation industry. While NSC belongs to the best of the industry regarding profitability, there are concerns on its financial health. NSC has a correct valuation and a medium growth rate. Finally NSC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
NSC had positive earnings in the past year.
NSC had a positive operating cash flow in the past year.
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
NSC has a Return On Assets of 6.00%. This is in the better half of the industry: NSC outperforms 63.16% of its industry peers.
With a decent Return On Equity value of 18.31%, NSC is doing good in the industry, outperforming 71.05% of the companies in the same industry.
The Return On Invested Capital of NSC (8.98%) is better than 71.05% of its industry peers.
The Average Return On Invested Capital over the past 3 years for NSC is in line with the industry average of 7.67%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6% | ||
| ROE | 18.31% | ||
| ROIC | 8.98% |
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
With an excellent Profit Margin value of 21.60%, NSC belongs to the best of the industry, outperforming 81.58% of the companies in the same industry.
In the last couple of years the Profit Margin of NSC has declined.
NSC has a Operating Margin of 37.77%. This is amongst the best in the industry. NSC outperforms 94.74% of its industry peers.
NSC's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 50.62%, NSC is in the better half of the industry, outperforming 60.53% of the companies in the same industry.
NSC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.77% | ||
| PM (TTM) | 21.6% | ||
| GM | 50.62% |
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 just above the Cost of Capital (WACC), so NSC is still creating some value.
Compared to 1 year ago, NSC has more shares outstanding
Compared to 5 years ago, NSC has less shares outstanding
NSC has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.15 indicates that NSC is not a great score, but indicates only limited risk for bankruptcy at the moment.
NSC has a Altman-Z score (2.15) which is comparable to the rest of the industry.
The Debt to FCF ratio of NSC is 614.50, which is on the high side as it means it would take NSC, 614.50 years of fcf income to pay off all of its debts.
With a Debt to FCF ratio value of 614.50, NSC perfoms like the industry average, outperforming 55.26% of the companies in the same industry.
A Debt/Equity ratio of 1.16 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 1.16, NSC is doing worse than 71.05% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 614.5 | ||
| Altman-Z | 2.15 |
ROIC/WACC0.99
WACC9.03%
2.3 Liquidity
A Current Ratio of 0.90 indicates that NSC may have some problems paying its short term obligations.
The Current ratio of NSC (0.90) is worse than 68.42% of its industry peers.
A Quick Ratio of 0.82 indicates that NSC may have some problems paying its short term obligations.
NSC has a worse Quick ratio (0.82) than 71.05% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.82 |
3. Growth
3.1 Past
NSC shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.77%.
The Earnings Per Share has been growing slightly by 2.93% on average over the past years.
Looking at the last year, NSC shows a decrease in Revenue. The Revenue has decreased by -0.27% in the last year.
The Revenue has been growing slightly by 1.42% on average over the past years.
EPS 1Y (TTM)0.77%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%7.42%
Revenue 1Y (TTM)-0.27%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%-1.59%
3.2 Future
NSC is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 11.66% yearly.
NSC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.50% yearly.
EPS Next Y11.15%
EPS Next 2Y12.67%
EPS Next 3Y12.75%
EPS Next 5Y11.66%
Revenue Next Year2.76%
Revenue Next 2Y3.88%
Revenue Next 3Y4.21%
Revenue Next 5Y5.5%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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 20.93, the valuation of NSC can be described as rather expensive.
68.42% of the companies in the same industry are more expensive than NSC, based on the Price/Earnings ratio.
NSC's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 29.63.
A Price/Forward Earnings ratio of 18.83 indicates a rather expensive valuation of NSC.
Compared to the rest of the industry, the Price/Forward Earnings ratio of NSC indicates a somewhat cheap valuation: NSC is cheaper than 68.42% of the companies listed in the same industry.
NSC is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.68, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.93 | ||
| Fwd PE | 18.83 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as NSC.
NSC's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 2003.57 | ||
| EV/EBITDA | 12.14 |
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.
NSC's earnings are expected to grow with 12.75% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.88
PEG (5Y)7.15
EPS Next 2Y12.67%
EPS Next 3Y12.75%
5. Dividend
5.1 Amount
NSC has a Yearly Dividend Yield of 2.10%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.35, NSC pays a better dividend. On top of this NSC pays more dividend than 94.74% of the companies listed in the same industry.
NSC's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
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 Years7
Div Non Decr Years23
5.3 Sustainability
NSC pays out 46.62% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of NSC is growing, but earnings are growing more, so the dividend growth is sustainable.
DP46.62%
EPS Next 2Y12.67%
EPS Next 3Y12.75%
247.76
-1.65 (-0.66%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners77.59%
Inst Owner Change-0.16%
Ins Owners0.02%
Ins Owner Change0.73%
Market Cap56.10B
Analysts75.63
Price Target279.82 (12.94%)
Short Float %0.96%
Short Ratio1.82
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
Yearly Dividend5.4
Dividend Growth(5Y)8.41%
DP46.62%
Div Incr Years7
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.72%
Min EPS beat(2)1.93%
Max EPS beat(2)3.5%
EPS beat(4)3
Avg EPS beat(4)1.58%
Min EPS beat(4)-5%
Max EPS beat(4)5.87%
EPS beat(8)4
Avg EPS beat(8)0.09%
EPS beat(12)5
Avg EPS beat(12)0.73%
EPS beat(16)9
Avg EPS beat(16)1.75%
Revenue beat(2)0
Avg Revenue beat(2)-1.57%
Min Revenue beat(2)-2.12%
Max Revenue beat(2)-1.01%
Revenue beat(4)0
Avg Revenue beat(4)-1.62%
Min Revenue beat(4)-2.53%
Max Revenue beat(4)-0.81%
Revenue beat(8)0
Avg Revenue beat(8)-1.53%
Revenue beat(12)4
Avg Revenue beat(12)-0.44%
Revenue beat(16)7
Avg Revenue beat(16)-0.1%
PT rev (1m)-1.76%
PT rev (3m)1.7%
EPS NQ rev (1m)-4.8%
EPS NQ rev (3m)-5.79%
EPS NY rev (1m)-4.01%
EPS NY rev (3m)-4.05%
Revenue NQ rev (1m)-2.34%
Revenue NQ rev (3m)-4.64%
Revenue NY rev (1m)-1.46%
Revenue NY rev (3m)-1.59%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.93 | ||
| Fwd PE | 18.83 | ||
| P/S | 4.63 | ||
| P/FCF | 2003.57 | ||
| P/OCF | 13.85 | ||
| P/B | 3.92 | ||
| P/tB | 3.92 | ||
| EV/EBITDA | 12.14 |
EPS(TTM)11.84
EY4.78%
EPS(NY)13.16
Fwd EY5.31%
FCF(TTM)0.12
FCFY0.05%
OCF(TTM)17.9
OCFY7.22%
SpS53.54
BVpS63.18
TBVpS63.18
PEG (NY)1.88
PEG (5Y)7.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6% | ||
| ROE | 18.31% | ||
| ROCE | 11.41% | ||
| ROIC | 8.98% | ||
| ROICexc | 9.37% | ||
| ROICexgc | 9.37% | ||
| OM | 37.77% | ||
| PM (TTM) | 21.6% | ||
| GM | 50.62% | ||
| FCFM | 0.23% |
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%
ROICexcg growth 3Y-2.05%
ROICexcg 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-Score6
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.16 | ||
| Debt/FCF | 614.5 | ||
| Debt/EBITDA | 2.81 | ||
| Cap/Depr | 297.41% | ||
| Cap/Sales | 33.19% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.31% | ||
| Profit Quality | 1.07% | ||
| Current Ratio | 0.9 | ||
| Quick Ratio | 0.82 | ||
| Altman-Z | 2.15 |
F-Score6
WACC9.03%
ROIC/WACC0.99
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)0.77%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%7.42%
EPS Next Y11.15%
EPS Next 2Y12.67%
EPS Next 3Y12.75%
EPS Next 5Y11.66%
Revenue 1Y (TTM)-0.27%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%-1.59%
Revenue Next Year2.76%
Revenue Next 2Y3.88%
Revenue Next 3Y4.21%
Revenue Next 5Y5.5%
EBIT growth 1Y15.43%
EBIT growth 3Y0.98%
EBIT growth 5Y2.8%
EBIT Next Year42.79%
EBIT Next 3Y18.15%
EBIT Next 5Y15.64%
FCF growth 1Y-96.63%
FCF growth 3Y-78.42%
FCF growth 5Y-56.86%
OCF growth 1Y27.46%
OCF growth 3Y-1.62%
OCF growth 5Y0.81%