Norfolk Southern Corp (NSC) stock analysis

P/E above its 5-year median

Norfolk Southern's P/E of 27.7 is above its own 5-year median of 22.0.

P/E above the industry

Norfolk Southern's P/E of 27.7 is above the Industrials median of 23.5.

EV/EBITDA above its 5-year median

Norfolk Southern's EV/EBITDA of 16.2 is above its 5-year median of 13.6.

P/B above the industry

Norfolk Southern's price-to-book of 4.44 is above the Industrials median of 2.46.

Trading above fair value

The share price of $330.59 is above our fair value estimate of $246.96.

Margin of safety under 20%

The price is 33.9% above fair value, so there is no margin of safety.

Revenue growing under 10% a year

Revenue grew -1.5% a year over the last three fiscal years, short of the 10% we look for.

EPS growing under 10% a year

Diluted EPS grew -2.8% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -9.4% over the last twelve months, against a 5-year average of 7.4% a year.

Growing slower than the industry

Revenue grew 6.0% over the last twelve months; the Industrials median is 7.9%.

Company guidance

No outlook found in earnings releases from the last twelve months.

Gross margin trend

This company does not report gross profit.

Return on equity over 15%

Return on equity was 16.8% over the last twelve months and averaged 19.8% over five years.

Return on capital over 10%

Return on invested capital was 10.2%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Norfolk Southern's return on equity of 16.8% is above the Industrials median of 6.0%.

Earnings grew over 5 years

Net income grew 7.4% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 20.7% over the last twelve months, against a 5-year average of 22.6%.

Net margin above the industry

Norfolk Southern's net margin of 20.7% is above the Industrials median of 2.5%.

High debt

Debt is 99.3% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 85.7% five years ago to 99.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 22.8% of total debt.

Interest well covered

Operating income covers interest expense 5.2 times.

Short-term assets don't cover short-term debts

Current assets are 0.90 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.53; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Norfolk Southern paid dividends worth 1.2% of the share price over the last twelve months.

Yield below Treasuries

The 1.2% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Norfolk Southern yields 1.2%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 45.2% of net income.

Covered by free cash flow

Dividends take 73.6% of free cash flow.