4-Star Stocks Poised to Pop: CSX
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, railroad operator CSX (NYS: CSX) has earned a respected four-star ranking.
With that in mind, let's take a closer look at CSX's business and see what CAPS investors are saying about the stock right now.
CSX facts
Headquarters (Founded) | Jacksonville, Fla. (1978) |
Market Cap | $22.5 billion |
Industry | Railroads |
Trailing-12-Month Revenue | $11.31 billion |
Management | Chairman/CEO Michael Ward (since 2003) CFO Oscar Munoz (since 2003) |
Return on Equity (Average, Past 3 Years) | 16.6% |
Dividend Yield | 2.3% |
Competitors | Canadian National Railway (NYS: CNI) Norfolk Southern (NYS: NSC) Union Pacific (NYS: UNP) |
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 96% of the 1,872 members who have rated CSX believe the stock will outperform the S&P 500 going forward. These bulls include aksys and PeterHix.
Late last month, aksys listed several of CSX's positives:
Coal demand in Asia is growing at an astonishing pace. Coupled with strong earnings, record revenue and a dropping operating ratio, all signs point to a bright future for CSX. Now is the time to buy.
In fact, CSX currently trades at a cheapish forward P/E of 10. That represents a slight discount to other railroad stocks like CN Rail (13), Norfolk Southern (11), and Union Pacific (11).
CAPS member PeterHix elaborates on the bull case:
• CSX is continuously increasing its profitability as shown in the last quarter. This also gives credence to their 2015 operating ratio target of 65%.
• CSX reported having seen global economic strength through the international demand for coal and auto-related parts. The pressures within trucking will drive future intermodal growth.
• The company is taking advantage of this growth through a $2.2B value creation investment plan to invest in this growth by making coal car and locomotive purchases.
• CSX has shown shareholder commitment through dividend increases (38% in May) and a share repurchase program. ...
• Due to this value and growth creation, I feel justified in using all-time valuation highs to find a price target. Based on F PE, PEG, PB and PS, my price target is $30.50.
What do you think about CSX, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to track CSX?Add it to your watchlist.
At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of CN Rail. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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