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CSX Stock Rises More Than 24% in a Year's Time: Here's Why

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Zacks Equity Research
·2 min read
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Shares of CSX Corporation CSX have rallied 24.9% in a year’s time, outperforming the industry’s 20.2% increase, primarily owing to its commitment to reward shareholders and the gradual recovery in its volumes.


 

Let’s delve deeper.

Despite coronavirus-led headwinds, CSX’s commitment to reward its shareholders boosted shares of the company.  In the first nine months of 2020, it repurchased 10 million shares for $664 million. In October, CSX’s board approved a new share buyback program worth $5 billion. This is in addition to approximately $1.1 billion already remaining under the existing share repurchase program. Moreover, in February, the company had hiked its dividend by 8%.

Additionally, gradual recovery in CSX’s volumes is expected to have lifted its shares. With the economy recovering from the coronavirus-induced slump, intermodal volumes rebounded in the third quarter of 2020. After an 11% year-over-year decline in the second quarter, volumes increased 7% in the third quarter with both domestic and international shipments increasing as a result of tightening truck capacity among other factors. As economy recovery picks up pace, volumes across all segments are expected to see improvement.

Zacks Rank & Key Picks

CSX carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are ArcBest Corporation ARCB, Ryder System, Inc. R and Herc Holdings Inc. HRI. While Ryder carries a Zacks Rank #2 (Buy), ArcBest and Herc Holdings sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of ArcBest, Ryder and Herc Holdings have gained more than 54%, 15% and 34% in a year’s time, respectively.

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Ryder System, Inc. (R) : Free Stock Analysis Report
 
CSX Corporation (CSX) : Free Stock Analysis Report
 
ArcBest Corporation (ARCB) : Free Stock Analysis Report
 
Herc Holdings Inc. (HRI) : Free Stock Analysis Report
 
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