Norfolk Southern Corp's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance of NSC
Norfolk Southern Corp (NYSE:NSC) recently announced a dividend of $1.35 per share, payable on 2024-02-20, with the ex-dividend date set for 2024-02-01. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Norfolk Southern Corp's dividend performance and assess its sustainability.
What Does Norfolk Southern Corp Do?
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Class-I railroad Norfolk Southern operates in the Eastern United States. On more than 20,000 miles of track, the firm hauls shipments of coal, intermodal traffic, and a diverse mix of automobile, agriculture, metal, chemical, and forest products.
A Glimpse at Norfolk Southern Corp's Dividend History
Norfolk Southern Corp has maintained a consistent dividend payment record since 1986. Dividends are currently distributed on a quarterly basis. Norfolk Southern Corp has increased its dividend each year since 2001. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 23 years. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Norfolk Southern Corp's Dividend Yield and Growth
As of today, Norfolk Southern Corp currently has a 12-month trailing dividend yield of 2.32% and a 12-month forward dividend yield of 2.32%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Norfolk Southern Corp's annual dividend growth rate was 12.80%. Extended to a five-year horizon, this rate decreased to 11.90% per year. And over the past decade, Norfolk Southern Corp's annual dividends per share growth rate stands at an impressive 10.60%.
Based on Norfolk Southern Corp's dividend yield and five-year growth rate, the 5-year yield on cost of Norfolk Southern Corp stock as of today is approximately 4.07%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-12-31, Norfolk Southern Corp's dividend payout ratio is 0.45.
Norfolk Southern Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Norfolk Southern Corp's profitability 8 out of 10 as of 2023-12-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Norfolk Southern Corp's growth rank of 8 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Norfolk Southern Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Norfolk Southern Corp's revenue has increased by approximately 11.90% per year on average, a rate that outperforms approximately 65.47% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Norfolk Southern Corp's earnings increased by approximately 8.70% per year on average, a rate that outperforms approximately 45.82% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 6.10%, which outperforms approximately 43.74% of global competitors.
Next Steps
In conclusion, Norfolk Southern Corp's upcoming dividend, consistent dividend growth rate, moderate payout ratio, and strong profitability and growth metrics, paint a promising picture for current and potential investors. These factors collectively suggest that Norfolk Southern Corp is positioned well to maintain its dividend payments, which may appeal to value investors looking for stable income streams. With a solid track record and favorable growth prospects, Norfolk Southern Corp stands out as a noteworthy consideration in the realm of dividend investing. Are you poised to take advantage of Norfolk Southern Corp's dividend opportunities?
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
