NORFOLK SOUTHERN CORP (NSC) Stock Fundamental Analysis
USA - NYSE:NSC - US6558441084 - Common Stock
278.09 USD
+0.93 (+0.34%)
278.09 USD
0 (0%)
Overall NSC gets a fundamental rating of 5 out of 10. We evaluated NSC against 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 is not valued too expensively and it also shows a decent growth rate. Finally NSC also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year NSC was profitable.
In the past year NSC had a positive cash flow from operations.
In the past 5 years NSC has always been profitable.
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 7.58%, NSC is doing good in the industry, outperforming 78.57% of the companies in the same industry.
Looking at the Return On Equity, with a value of 22.63%, NSC belongs to the top of the industry, outperforming 88.10% of the companies in the same industry.
NSC's Return On Invested Capital of 9.16% is fine compared to the rest of the industry. NSC outperforms 73.81% 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 7.92%.
The last Return On Invested Capital (9.16%) for NSC is above the 3 year average (9.15%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 22.63% | ||
| ROIC | 9.16% |
ROA(3y)6.26%
ROA(5y)6.38%
ROE(3y)19.41%
ROE(5y)18.77%
ROIC(3y)9.15%
ROIC(5y)8.93%
1.3 Margins
NSC has a better Profit Margin (27.48%) than 92.86% of its industry peers.
NSC's Profit Margin has declined in the last couple of years.
With an excellent Operating Margin value of 38.68%, NSC belongs to the best of the industry, outperforming 97.62% 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 (51.67%) is better than 66.67% of its industry peers.
NSC's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 38.68% | ||
| PM (TTM) | 27.48% | ||
| GM | 51.67% |
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) just above the Cost of Capital (WACC), NSC is 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
NSC has an Altman-Z score of 2.28. 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 (2.28) which is comparable to the rest of the industry.
NSC has a debt to FCF ratio of 8.58. This is a slightly negative value and a sign of low solvency as NSC would need 8.58 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 8.58, NSC is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
A Debt/Equity ratio of 1.11 is on the high side and indicates that NSC has dependencies on debt financing.
NSC has a Debt to Equity ratio of 1.11. This is in the lower half of the industry: NSC underperforms 73.81% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 8.58 | ||
| Altman-Z | 2.28 |
ROIC/WACC1.01
WACC9.1%
2.3 Liquidity
A Current Ratio of 0.79 indicates that NSC may have some problems paying its short term obligations.
The Current ratio of NSC (0.79) is worse than 73.81% of its industry peers.
NSC has a Quick Ratio of 0.79. This is a bad value and indicates that NSC is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of NSC (0.71) is worse than 76.19% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.71 |
3. Growth
3.1 Past
NSC shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.24%, which is quite good.
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.
Looking at the last year, NSC shows a small growth in Revenue. The Revenue has grown by 0.71% in the last year.
The Revenue has been growing slightly by 1.42% on average over the past years.
EPS 1Y (TTM)11.24%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%7.52%
Revenue 1Y (TTM)0.71%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%2.17%
3.2 Future
Based on estimates for the next years, NSC will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.22% on average per year.
NSC is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.69% yearly.
EPS Next Y7.33%
EPS Next 2Y9.48%
EPS Next 3Y9.7%
EPS Next 5Y9.22%
Revenue Next Year1.64%
Revenue Next 2Y3.02%
Revenue Next 3Y3.47%
Revenue Next 5Y3.69%
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.
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 22.66, the valuation of NSC can be described as rather expensive.
Based on the Price/Earnings ratio, NSC is valued a bit cheaper than 71.43% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 27.20. NSC is around the same levels.
NSC is valuated rather expensively with a Price/Forward Earnings ratio of 19.60.
61.90% of the companies in the same industry are more expensive than NSC, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.71, NSC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.66 | ||
| Fwd PE | 19.6 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of NSC is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, NSC is valued a bit cheaper than 73.81% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 30.82 | ||
| EV/EBITDA | 12.86 |
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 excellent profitability rating of NSC may justify a higher PE ratio.
PEG (NY)3.09
PEG (5Y)7.75
EPS Next 2Y9.48%
EPS Next 3Y9.7%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.97%, NSC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.59, NSC pays a better dividend. On top of this NSC pays more dividend than 88.10% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.38, NSC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
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
NSC pays out 36.45% of its income as dividend. This is a sustainable payout ratio.
The dividend of NSC is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP36.45%
EPS Next 2Y9.48%
EPS Next 3Y9.7%
278.09
+0.93 (+0.34%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners79.66%
Inst Owner Change-4.81%
Ins Owners0.02%
Ins Owner Change0.53%
Market Cap62.39B
Analysts70
Price Target304.83 (9.62%)
Short Float %1.31%
Short Ratio1.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.97% |
Yearly Dividend5.4
Dividend Growth(5Y)8.41%
DP36.45%
Div Incr Years0
Div Non Decr Years23
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.19%
Min EPS beat(2)-1.39%
Max EPS beat(2)-0.99%
EPS beat(4)2
Avg EPS beat(4)0.76%
Min EPS beat(4)-1.39%
Max EPS beat(4)3.5%
EPS beat(8)3
Avg EPS beat(8)-0.08%
EPS beat(12)5
Avg EPS beat(12)0.7%
EPS beat(16)7
Avg EPS beat(16)0.76%
Revenue beat(2)0
Avg Revenue beat(2)-1.02%
Min Revenue beat(2)-1.61%
Max Revenue beat(2)-0.43%
Revenue beat(4)0
Avg Revenue beat(4)-1.29%
Min Revenue beat(4)-2.12%
Max Revenue beat(4)-0.43%
Revenue beat(8)0
Avg Revenue beat(8)-1.24%
Revenue beat(12)2
Avg Revenue beat(12)-0.98%
Revenue beat(16)6
Avg Revenue beat(16)-0.28%
PT rev (1m)1.55%
PT rev (3m)15.16%
EPS NQ rev (1m)-0.19%
EPS NQ rev (3m)-2.28%
EPS NY rev (1m)-0.31%
EPS NY rev (3m)-0.45%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)-0.28%
Revenue NY rev (1m)-0.21%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.66 | ||
| Fwd PE | 19.6 | ||
| P/S | 5.12 | ||
| P/FCF | 30.82 | ||
| P/OCF | 14.84 | ||
| P/B | 4.22 | ||
| P/tB | 4.22 | ||
| EV/EBITDA | 12.86 |
EPS(TTM)12.27
EY4.41%
EPS(NY)14.19
Fwd EY5.1%
FCF(TTM)9.02
FCFY3.24%
OCF(TTM)18.74
OCFY6.74%
SpS54.28
BVpS65.91
TBVpS65.91
PEG (NY)3.09
PEG (5Y)7.75
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.58% | ||
| ROE | 22.63% | ||
| ROCE | 11.64% | ||
| ROIC | 9.16% | ||
| ROICexc | 9.47% | ||
| ROICexgc | 9.47% | ||
| OM | 38.68% | ||
| PM (TTM) | 27.48% | ||
| GM | 51.67% | ||
| FCFM | 16.62% |
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-Score8
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.11 | ||
| Debt/FCF | 8.58 | ||
| Debt/EBITDA | 2.71 | ||
| Cap/Depr | 158.78% | ||
| Cap/Sales | 17.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.1% | ||
| Profit Quality | 60.47% | ||
| Current Ratio | 0.79 | ||
| Quick Ratio | 0.71 | ||
| Altman-Z | 2.28 |
F-Score8
WACC9.1%
ROIC/WACC1.01
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)11.24%
EPS 3Y-0.78%
EPS 5Y2.93%
EPS Q2Q%7.52%
EPS Next Y7.33%
EPS Next 2Y9.48%
EPS Next 3Y9.7%
EPS Next 5Y9.22%
Revenue 1Y (TTM)0.71%
Revenue growth 3Y2.85%
Revenue growth 5Y1.42%
Sales Q2Q%2.17%
Revenue Next Year1.64%
Revenue Next 2Y3.02%
Revenue Next 3Y3.47%
Revenue Next 5Y3.69%
EBIT growth 1Y22.55%
EBIT growth 3Y0.98%
EBIT growth 5Y2.8%
EBIT Next Year39.89%
EBIT Next 3Y16.95%
EBIT Next 5Y11.1%
FCF growth 1Y1.3%
FCF growth 3Y-78.42%
FCF growth 5Y-56.86%
OCF growth 1Y3.62%
OCF growth 3Y-1.62%
OCF growth 5Y0.81%