Stocks of companies that are involved in the transport of industrial and commercial goods through the rail route are termed as railroad stocks. Railroad industry forms an integral part of the US economy; hence railroad stocks provide investors with the opportunity to add stable and secure stocks to their investment portfolio.
Railroad stocks are very sensitive to the overall economy. The performance of railroad companies is related to the demand for coal, oil and gas, and other commodities that they transport. The railroad industry has been negatively impacted in the recent past due to increasing fuel costs, reduction in coal transport, and usage of pipelines over railroads for transportation.
|CNI||Canadian National Railway Company||$109.91||43.00%||78.2B|
|CP||Canadian Pacific Railway Limited||$367.56||63.12%||61.2B|
|FSTR||L.B. Foster Company||$16.06||31.00%||173.5M|
|GBX||The Greenbrier Companies, Inc.||$45.45||183.89%||1.5B|
|GSH||Guangshen Railway Company Limited||$0.13||160.00%||5.0M|
|GWR||Genesee & Wyoming Inc.||$20.80||44.24%||383.1M|
|KIQ||Kelso Technologies Inc.||$0.75||50.00%||52.1M|
|KSU||Kansas City Southern||$296.58||129.30%||27.0B|
|NSC||Norfolk Southern Corporation||$278.54||81.13%||75.6B|
|RAIL||FreightCar America, Inc.||$5.16||260.84%||80.4M|
|TRN||Trinity Industries, Inc.||$26.72||70.19%||3.0B|
|UNP||Union Pacific Corporation||$217.98||48.18%||145.3B|
|USDP||USD Partners LP||$5.63||125.20%||155.9M|
|DUOT||Duos Technologies Group Inc||$9.24||122.65%||32.7M|
|KIQ||Kelso Technologies Inc||$0.75||50.00%||52.1M|
|CJPRY||Central Japan Railway||$14.07||-11.45%||3202.3B|
|CWYCY||China Railway Construction Corp||#N/A||#N/A||#N/A|
Factors to Consider Before Investing in Railroad Stocks
Investors must consider that railroad stocks have exposure to both the cyclicality of the economy and individual company-specific earnings drivers. Therefore, investors must consider both the macroeconomic factors as well as the fundamentals of the companies before investing in railroad stocks.
Investors should take the number of freight cars, active locomotives, and the length of the railroad network into consideration to assess the strength of railroad companies and railroad stocks. The other financial parameters, including top-line and bottom-line growth, operating ratios, and profit margin, also give valuable insights into the future expectations from railroad stocks.
Additionally, railroad stocks are considered to be most suitable for regular and stable income in the form of dividends. Investors should look at the dividend yield and rate of return over the past few years before selecting railroad stocks.
Which Railroad Stocks Should I Buy?
We have shortlisted the best railroad stocks from the many that trade on the US stock exchanges. The top railroad stocks have been performing well for years. They belong to well-established companies with solid track records.
Railroad stocks have suffered some setbacks in recent times due to difficult economic conditions and the changes in trends. However, they still remain ideal for value investors looking to enter the railroad industry space. They remain excellent avenues for both short-term income and long-term capital gains.
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