North American railroad stocks are on a tear. The railroad industry is dominated by a handful of Class I railroads that share the most of the freight traffic in the continent. Some of the factors the growth of railroad companies in the past few years include the shale oil boom in the U.S., limited pipeline capacity, issues with building new pipelines, growing shipment of coal and other commodities, etc. Despite the recent Lac Magentic tragedy in Canada the transportation of crude by rail has not declined and as the U.S. economy recovers railroads can be estimated to carry more freight.
Some of the railroad stocks are already trading over $100/share. Canadian National, Canadian Pacific(CP) and Norfolk Southern(NSC) have announced strong Q3 earnings with Canadian National (CNI) rewarding shareholders with a 2 for 1 stock split.
The following chart shows the 5-year performance of Canadian National vs. Canadian Pacific:
Click to enlarge
The following chart shows the 5-year performance of major U.S. railroads trading on the markets:
Source: Yahoo Finance
The biggest North American railroads article in the Financial Times gives a neat introduction of the railroads.
Here are the major railroad stocks with their current dividend yields:
1.Company: Canadian National Railway Co (CNI)
Current Dividend Yield: 1.50%
2.Company: Canadian Pacific Railway Ltd(CP)
Current Dividend Yield: 0.94%
3.Company: CSX Corp (CSX)
Current Dividend Yield: 2.30%
4.Company: Kansas City Southern (KSU)
Current Dividend Yield: 0.73%
5.Company: Kansas City Southern(KSU)
Current Dividend Yield: 2.08%
6.Company: Norfolk Southern Corp(NSC)
Current Dividend Yield: 2.42%
Another major railroad BNSF is private and is owned by Berkshire Hathaway Inc.
Disclosure: Long CSX, NSC and CNI