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.
Best Railroad Stocks
Ticker | Company Name | Last Price | 1-Year Return | Market Cap |
|---|---|---|---|---|
| CNI | Canadian National Railway Company | $117.21 | -7.49% | 76.1B |
| CP | Canadian Pacific Railway Limited | $73.47 | -8.38% | 93.3B |
| CSX | CSX Corporation | $33.29 | 6.19% | 66.8B |
| FSTR | L.B. Foster Company | $19.81 | 113.70% | 219.4M |
| GBX | The Greenbrier Companies, Inc. | $38.61 | 6.33% | 1.2B |
| GSH | Guangshen Railway Company Limited | $0.05 | #N/A | 2.2M |
| GWR | Genesee & Wyoming Inc. | $0.08 | 33.33% | 27.7M |
| KIQ | Kelso Technologies Inc. | $0.15 | -40.00% | 11.2M |
| KSU | Kansas City Southern | #N/A | #N/A | #N/A |
| NSC | Norfolk Southern Corporation | $223.91 | -9.46% | 50.6B |
| RAIL | FreightCar America, Inc. | $2.30 | -36.46% | 41.2M |
| TRN | Trinity Industries, Inc. | $25.54 | -16.21% | 2.1B |
| UNP | Union Pacific Corporation | $232.17 | 10.00% | 141.5B |
| USDP | USD Partners LP | $0.21 | -93.60% | 7.0M |
| WAB | Wabtec Corporation | $118.86 | 16.83% | 21.3B |
| CUB | Cubic Corporation | $0.02 | -75.00% | 4.4M |
| DUOT | Duos Technologies Group Inc | $3.03 | 11.81% | 22.0M |
| HUBG | Hub Group | $79.64 | 1.34% | 2.5B |
| KIQ | Kelso Technologies Inc | $0.15 | -40.00% | 11.2M |
| ALSMY | Alstom | $1.17 | -54.12% | 4.3B |
| CJPRY | Central Japan Railway | $12.00 | 2.56% | 3668.9B |
| CWYCY | China Railway Construction Corp | #N/A | #N/A | #N/A |
- Alstom (ALSMY) – A French multinational company operating worldwide in rail transport markets, active in the fields of passenger transportation, signalling, and locomotives.
- Central Japan Railway (CJPRY) – Commonly known as JR Central, it is one of the Japan Railways Group companies and operates the Tokaido Shinkansen, a high-speed rail line between Tokyo and Osaka.
- Canadian National Railway Company (CNI) – A Canadian Class I freight railway headquartered in Montreal, Quebec, that serves Canada and the Midwestern and Southern United States.
- Canadian Pacific Railway Limited (CP) – A Canadian Class I railway incorporated in 1881. The railroad is owned by Canadian Pacific Railway Limited, which began operations as legal owner in a corporate restructuring in 2001.
- CSX Corporation (CSX) – An American holding company focused on rail transportation and real estate in North America, among other industries. The railroad subsidiary, CSX Transportation, operates a network primarily located in the Eastern United States.
- Cubic Corporation (CUB) – An American public transportation and defense corporation. Cubic provides fare collection devices and services for public transit authorities, and training, operations, and technical support services for the military.
- China Railway Construction Corp (CWYCY) – One of the largest construction companies in the world. It is also engaged in the design and construction of railway and highway networks.
- Duos Technologies Group Inc (DUOT) – An American company that provides advanced analytical technology solutions with a strong portfolio in artificial intelligence and machine learning.
- L.B. Foster Company (FSTR) – A leading manufacturer, fabricator, and distributor of products and services for the rail, construction, energy, and utility markets with locations in North America and Europe.
- The Greenbrier Companies, Inc. (GBX) – An American international supplier of equipment and services to global freight transportation markets.
- Guangshen Railway Company Limited (GSH) – A Chinese company that operates the railways in the Guangdong province of China.
- Genesee & Wyoming Inc. (GWR) – An American short line railroad holding company, it operates freight railroads in the United States, Canada, Australia, the Netherlands, and Belgium.
- Hub Group (HUBG) – An American transportation management company providing intermodal, truck brokerage, and logistics services.
- Kelso Technologies Inc. (KIQ) – A Canadian company providing innovative solutions and products to the rail sector, primarily in the United States and Canada.
- Kansas City Southern (KSU) – An American Class I railroad operating in the central and south-central United States.
- Norfolk Southern Corporation (NSC) – An American Class I railroad operating 19,420 miles route miles in 22 states and the District of Columbia.
- FreightCar America, Inc. (RAIL) – A manufacturer of freight cars for the railway industry based in the United States.
- Trinity Industries, Inc. (TRN) – An American industrial corporation that owns a variety of businesses including railcars, barges, construction products, and energy equipment.
- Union Pacific Corporation (UNP) – An American Fortune 500 company, Union Pacific Railroad is the principal operating company of the Union Pacific Corporation; it is one of the largest transportation companies in the United States.
State of the Railroad Industry
The railroad industry has been a key factor in the development of the United States. The railroad system was a catalyst that spurred the industrial revolution and led to increases in economic growth. The railroad system was also responsible for an increase in overall economic productivity. The railroad industry also boosted trade among communities and helped increase international trade. The railroad industry is critical to the modernization of the economy and society as there are more jobs, goods, and services available to people living in rural areas.
The Railroad Industry is critical to our society because it has allowed for more jobs, goods, and services to be available to people living in rural areas. It has always played an important part in all components of society, but especially when America’s population was small and largely rural. Railroads are part of the story of how we went from a population where 1 in 4 was a farmer to one with only 1 in 100 being farmers.
During the nineteenth century, Americans looked forward to railroads as their first and best hope for economic growth and development on both individual and national scales. Government officials saw them as the nation’s solution to a variety of social and economic ills. Farmers saw them as critical for their crops, land values, and livestock. Investors wanted railroads because they could deliver massive wealth to anyone who invested in them.
Railroads continue to play an important role in society. While we can now transport goods via truck and plane, railroads are still used regularly. Many of today’s railroads are engaged in short haul freight, hauling bulk materials such as coal, grain, and cement. The main advantage that a railroad has over trucking (besides size) is that the railroads have their own separate right-of-way for the track that allows them to set speed limits and stop at local farms and businesses along the way. Trucking, on the other hand, must share space with other vehicles and can only be in motion when traffic is moving.
While railroads are not as important as they once were, they are still a critical part of the transportation industry in America.
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.
