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Here's Why CSX Stock is a Compelling Portfolio Addition
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CSX's (CSX - Free Report) merchandise pricing, along with higher intermodal and coal volumes, is boosting the company's top line. The shareholder-friendly approach also bodes well for the company. Owing to the tailwinds, shares of CSX have performed impressively on the bourse. If you have not taken advantage of its share price appreciation yet, it’s time to do so.
Let’s take a look at the factors that make the CSX stock a strong investment pick at the moment.
Robust Price Performance: A glimpse at the company’s price trend reveals that its shares have risen 0.8% in the past 30 days, surpassing the industry’s decline of 1.7%.
Image Source: Zacks Investment Research
Solid Zacks Rank: CSX currently carries a Zacks Rank #2 (Buy).
Northward Estimate Revision: The Zacks Consensus Estimate for earnings per share has been revised upward by 5.95% over the past 90 days for the current year. For the next year, the consensus mark for earnings per share has moved 11.28% north in the same time frame. The favorable estimate revisions indicate brokers’ confidence in the stock.
Impressive Earnings Surprise History: CSX has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and met twice, delivering an average surprise of 1.12%.
Driving Factors: High export coal volumes, increased intermodal shipments and pricing gains are boosting CSX's top line. In 2023, coal volumes rose by 3% due to strong export demand, a trend that continued into the first quarter of 2024. We anticipate a 1.6% year-over-year increase in coal volumes in the second quarter of 2024.
The shareholder-friendly approach bodes well for CSX. In February 2024, the company announced a 9.1% increase in its quarterly dividend to 12 cents per share. CSX has been consistently rewarding its shareholders through dividends and buybacks, returning more than $3.7 billion in 2021, $5.58 billion in 2022 and $4.36 billion in 2023.
CSX's current ratio (a measure of liquidity) at the end of the first quarter of 2024 stood at 1.15, much higher than the 0.83 reading for its industry. A current ratio of greater than 1 is desirable. CSX’s cash and cash equivalents were $1.48 billion at the end of the first quarter of 2024, much higher than the current debt of $557 million. This implies that the company has sufficient cash to meet its current debt obligations.
SkyWest currently carries a Zacks Rank #2 and has an expected earnings growth rate of 787% for the current year.
SKYW has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 128%. Shares of SkyWest have jumped 100.8% in the past year.
The company has an encouraging track record concerning the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 10.3%. Shares of Kirby have climbed 55.5% in the past year.
Image: Bigstock
Here's Why CSX Stock is a Compelling Portfolio Addition
CSX's (CSX - Free Report) merchandise pricing, along with higher intermodal and coal volumes, is boosting the company's top line. The shareholder-friendly approach also bodes well for the company. Owing to the tailwinds, shares of CSX have performed impressively on the bourse. If you have not taken advantage of its share price appreciation yet, it’s time to do so.
Let’s take a look at the factors that make the CSX stock a strong investment pick at the moment.
Robust Price Performance: A glimpse at the company’s price trend reveals that its shares have risen 0.8% in the past 30 days, surpassing the industry’s decline of 1.7%.
Image Source: Zacks Investment Research
Solid Zacks Rank: CSX currently carries a Zacks Rank #2 (Buy).
Northward Estimate Revision: The Zacks Consensus Estimate for earnings per share has been revised upward by 5.95% over the past 90 days for the current year. For the next year, the consensus mark for earnings per share has moved 11.28% north in the same time frame. The favorable estimate revisions indicate brokers’ confidence in the stock.
Impressive Earnings Surprise History: CSX has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in two of the trailing four quarters and met twice, delivering an average surprise of 1.12%.
Driving Factors: High export coal volumes, increased intermodal shipments and pricing gains are boosting CSX's top line. In 2023, coal volumes rose by 3% due to strong export demand, a trend that continued into the first quarter of 2024. We anticipate a 1.6% year-over-year increase in coal volumes in the second quarter of 2024.
The shareholder-friendly approach bodes well for CSX. In February 2024, the company announced a 9.1% increase in its quarterly dividend to 12 cents per share. CSX has been consistently rewarding its shareholders through dividends and buybacks, returning more than $3.7 billion in 2021, $5.58 billion in 2022 and $4.36 billion in 2023.
CSX's current ratio (a measure of liquidity) at the end of the first quarter of 2024 stood at 1.15, much higher than the 0.83 reading for its industry. A current ratio of greater than 1 is desirable. CSX’s cash and cash equivalents were $1.48 billion at the end of the first quarter of 2024, much higher than the current debt of $557 million. This implies that the company has sufficient cash to meet its current debt obligations.
Stocks to Consider
Some better-ranked stocks for investors’ consideration in the Zacks Transportation sector include SkyWest (SKYW - Free Report) and Kirby Corporation (KEX - Free Report) .
SkyWest currently carries a Zacks Rank #2 and has an expected earnings growth rate of 787% for the current year.
SKYW has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average surprise of 128%. Shares of SkyWest have jumped 100.8% in the past year.
KEX sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here. Kirby has an expected earnings growth rate of 42.5% for the current year.
The company has an encouraging track record concerning the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 10.3%. Shares of Kirby have climbed 55.5% in the past year.