The Railroad industry in North America is an oligopoly with a handful of players dominating the market. From an investment perspective railroads are solid long-term investments with consistent growth and stable and growing dividends. As a cyclical sector, railroads tend to follow the overall state of the economy.
Railroad stocks were flat to down until a few months ago this year. Then they stabilized and recovered strongly when commodities such as crude oil bottomed out. Though they are up substantially year-to-date, they may go even higher according to a recent article in the Journal.
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Source: Has U.S. Rail Traffic Found Its Rebound?, WSJ, July 14, 2016
The major North American railroads are listed below with their year-to-date(YTD) price returns:
1.CSX Transportation (CSX)
YTD Return: 9.90%
2. Norfolk Southern Railway (NSC)
YTD Return: 8.16%
3.Kansas City Southern Railway (KSU)
YTD Return: 26.40%
4,Union Pacific Railroad (UNP)
YTD Return: 20.18%
5.Canadian National (CNI)
YTD Return: 11.47%
6.Canadian Pacific (CP)
YTD Return: 10.87%
Source: Yahoo Finance
Disclosure: Long CNI, CSX, NSC and UNP
