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.
Ticker | Company Name | Last Price | 1-Year Return | Market Cap |
|---|---|---|---|---|
| CNI | Canadian National Railway Company | $114.94 | -15.31% | 77.7B |
| CP | Canadian Pacific Railway Limited | $75.99 | -8.27% | 96.2B |
| CSX | CSX Corporation | $29.11 | -22.44% | 60.0B |
| FSTR | L.B. Foster Company | $11.11 | -28.46% | 121.8M |
| GBX | The Greenbrier Companies, Inc. | $31.84 | -39.12% | 1.0B |
| GSH | Guangshen Railway Company Limited | $0.05 | -54.55% | 2.2M |
| GWR | Genesee & Wyoming Inc. | $0.09 | -43.75% | 26.5M |
| KIQ | Kelso Technologies Inc. | $0.29 | -40.82% | 19.9M |
| KSU | Kansas City Southern | #N/A | #N/A | #N/A |
| NSC | Norfolk Southern Corporation | $204.59 | -28.12% | 46.6B |
| RAIL | FreightCar America, Inc. | $3.02 | -48.29% | 52.0M |
| TRN | Trinity Industries, Inc. | $23.74 | -31.82% | 1.9B |
| UNP | Union Pacific Corporation | $196.58 | -28.60% | 120.3B |
| USDP | USD Partners LP | $3.02 | -47.48% | 102.0M |
| WAB | Wabtec Corporation | $98.33 | 0.06% | 17.7B |
| CUB | Cubic Corporation | $0.04 | -96.40% | 8.3M |
| DUOT | Duos Technologies Group Inc | $2.90 | -50.43% | 20.7M |
| HUBG | Hub Group | $82.38 | 3.56% | 2.7B |
| KIQ | Kelso Technologies Inc | $0.29 | -40.82% | 19.9M |
| ALSMY | Alstom | $2.58 | 14.16% | 9.2B |
| CJPRY | Central Japan Railway | $12.12 | -9.28% | 3270.3B |
| CWYCY | China Railway Construction Corp | #N/A | #N/A | #N/A |
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.
