NORFOLK SOUTHERN CORP (NSC)
US6558441084 - Common Stock
We assign a fundamental rating of 4 out of 10 to NSC. NSC was compared to 38 industry peers in the Ground Transportation industry. There are concerns on the financial health of NSC while its profitability can be described as average. NSC is valied quite expensively at the moment, while it does show a decent growth rate.
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.
Each year in the past 5 years NSC has been profitable.
Each year in the past 5 years NSC had a positive operating cash flow.
1.2 Ratios
NSC has a Return On Assets of 5.58%. This is in the better half of the industry: NSC outperforms 60.53% of its industry peers.
With a decent Return On Equity value of 17.50%, NSC is doing good in the industry, outperforming 71.05% of the companies in the same industry.
The Return On Invested Capital of NSC (8.82%) is better than 68.42% of its industry peers.
NSC had an Average Return On Invested Capital over the past 3 years of 9.42%. This is below the industry average of 11.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.58% | ||
| ROE | 17.5% | ||
| ROIC | 8.82% |
ROA(3y)6.86%
ROA(5y)6.61%
ROE(3y)20.65%
ROE(5y)18.69%
ROIC(3y)9.42%
ROIC(5y)8.92%
1.3 Margins
With an excellent Profit Margin value of 19.82%, NSC belongs to the best of the industry, outperforming 81.58% of the companies in the same industry.
NSC's Profit Margin has declined in the last couple of years.
The Operating Margin of NSC (36.33%) is better than 89.47% of its industry peers.
NSC's Operating Margin has been stable in the last couple of years.
NSC has a Gross Margin (49.06%) which is in line with its industry peers.
NSC's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.33% | ||
| PM (TTM) | 19.82% | ||
| GM | 49.06% |
OM growth 3Y-1.93%
OM growth 5Y-1.14%
PM growth 3Y-9.93%
PM growth 5Y-8.36%
GM growth 3Y-2.03%
GM growth 5Y-0.36%
2. Health
2.1 Basic Checks
NSC has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, NSC has less shares outstanding
The number of shares outstanding for NSC has been reduced compared to 5 years ago.
NSC has a worse debt/assets ratio than last year.
2.2 Solvency
NSC has an Altman-Z score of 2.17. 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.
With a Altman-Z score value of 2.17, NSC is not doing good in the industry: 63.16% of the companies in the same industry are doing better.
NSC has a Debt/Equity ratio of 1.21. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of NSC (1.21) is worse than 68.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | N/A | ||
| Altman-Z | 2.17 |
ROIC/WACC1.11
WACC7.97%
2.3 Liquidity
A Current Ratio of 0.73 indicates that NSC may have some problems paying its short term obligations.
NSC has a Current ratio of 0.73. This is amonst the worse of the industry: NSC underperforms 81.58% of its industry peers.
NSC has a Quick Ratio of 0.73. This is a bad value and indicates that NSC is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.65, NSC is doing worse than 81.58% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
NSC shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.75%.
NSC shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 4.30% yearly.
NSC shows a decrease in Revenue. In the last year, the revenue decreased by -1.20%.
Measured over the past years, NSC shows a small growth in Revenue. The Revenue has been growing by 1.19% on average per year.
EPS 1Y (TTM)-5.75%
EPS 3Y8.3%
EPS 5Y4.3%
EPS Q2Q%22.64%
Revenue 1Y (TTM)-1.2%
Revenue growth 3Y7.49%
Revenue growth 5Y1.19%
Sales Q2Q%2.69%
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 10.05% on average per year.
Based on estimates for the next years, NSC will show a small growth in Revenue. The Revenue will grow by 4.57% on average per year.
EPS Next Y1.95%
EPS Next 2Y8.04%
EPS Next 3Y9.81%
EPS Next 5Y10.05%
Revenue Next Year-0.03%
Revenue Next 2Y2.06%
Revenue Next 3Y2.99%
Revenue Next 5Y4.57%
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 22.46, the valuation of NSC can be described as rather expensive.
Based on the Price/Earnings ratio, NSC is valued a bit cheaper than the industry average as 68.42% of the companies are valued more expensively.
NSC is valuated rather cheaply when we compare the Price/Earnings ratio to 28.53, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 19.05, the valuation of NSC can be described as rather expensive.
71.05% 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 23.40, NSC is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.46 | ||
| Fwd PE | 19.05 |
4.2 Price Multiples
NSC's Enterprise Value to EBITDA is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | N/A | ||
| EV/EBITDA | 13.07 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates NSC does not grow enough to justify the current Price/Earnings ratio.
NSC has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)11.54
PEG (5Y)5.23
EPS Next 2Y8.04%
EPS Next 3Y9.81%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.04%, NSC has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 1.64, NSC pays a better dividend. On top of this NSC pays more dividend than 92.11% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.22, NSC has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
5.2 History
The dividend of NSC is nicely growing with an annual growth rate of 12.05%!
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)12.05%
Div Incr Years7
Div Non Decr Years22
5.3 Sustainability
NSC pays out 50.56% of its income as dividend. 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.
DP50.56%
EPS Next 2Y8.04%
EPS Next 3Y9.81%
NORFOLK SOUTHERN CORP
NYSE:NSC (11/15/2024, 8:04:00 PM)
After market: 261.26 0 (0%)261.26
-3.5 (-1.32%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap59.11B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.04% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.46 | ||
| Fwd PE | 19.05 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)11.54
PEG (5Y)5.23
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.58% | ||
| ROE | 17.5% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 36.33% | ||
| PM (TTM) | 19.82% | ||
| GM | 49.06% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.28
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.21 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.73 | ||
| Quick Ratio | 0.65 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)-5.75%
EPS 3Y8.3%
EPS 5Y
EPS Q2Q%
EPS Next Y1.95%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.2%
Revenue growth 3Y7.49%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y