Railroad Stocks – Analysis 02/15/2020

Every one of the six railroad stocks are at or above their all-time highs. As of today, February 15, 2020, the various stock prices are as follows:

Union Pacific                    $184.65
Norfolk Southern              $206.85
Canadian National              $93.93
Kansas City Southern       $173.64
Canadian Pacific              $270.86
CSX                                    $79.59

In addition, the price to book ratios are also higher than last quarter. The key question for me related to this fund is figuring out if there is value in any of the stocks. To do this, I must fill out a table of various preferred ratios and then explain them in a write-up. This way the reader will understand my reasoning as I write about it further below.

Here is the table.

Railroad Fund Analysis 02-15-2020

Gross Profit Margin

I highlighted in yellow those particular ratios that are the best indicating outstanding performance for the respective row. I place emphasis on two particular ratios.

The first is the gross profit value. This is how well a company performs from actual services. Notice that Canadian National has the highest gross profit margin. This means their costs to operate their fleet of trains is 56.23% which is efficient. This is important because the 43.77% margin covers administrative overhead, interest on debt and income taxes. The balance is the net profit. Notice how Canadian National has a high net profit at 28 cents on the dollar. This bodes well for any owner of stock.

Now take a look at the operational profit

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