I recently wrote about the railroads ("The Railroads") because I think they've sold off of late. The usual reasons cited are the slowing of the oil exploration industry and the restrictions placed on, and the decline of, the coal industry in the US. But there's so much more to the rail industry and as the price of oil comes back this year, shipments of oil will come back also. The only real event that will slow the rail transportation of oil is the development of pipelines. And building pipelines is expensive and time consuming.
In the meantime, I'm adding shares of railroad companies to my portfolio with the intent that these shares will increase over time and that the railroads will continue to increase their dividends over time. This past week CSX announced that they are increasing their quarterly dividend by 13%, to 18 cents a common share from 16 cents. CSX Corp has now boosted cash returns 13 times in the past decade, at an annualized growth rate of 26%. The dividend is payable June 15 to shareholders of record on May 29. This two-cent increase translates into an additional $19.8 million returned to shareholders each quarter.
In the meantime, I'm adding shares of railroad companies to my portfolio with the intent that these shares will increase over time and that the railroads will continue to increase their dividends over time. This past week CSX announced that they are increasing their quarterly dividend by 13%, to 18 cents a common share from 16 cents. CSX Corp has now boosted cash returns 13 times in the past decade, at an annualized growth rate of 26%. The dividend is payable June 15 to shareholders of record on May 29. This two-cent increase translates into an additional $19.8 million returned to shareholders each quarter.
CSX Corporation, together with its subsidiaries, provides rail-based transportation services in the United States and Canada. It offers traditional rail services, and transports intermodal containers and trailers. The company transports crushed stone, sand and gravel, metal, phosphate, fertilizer, food, consumer, agricultural, automotive, paper, and chemical products; and coal, coke, and iron ore to electricity-generating power plants, steel manufacturers, and industrial plants, as well as exports coal to deep-water port facilities. It also provides intermodal transportation services through a network of approximately 50 terminals transporting manufactured consumer goods in containers in the eastern United States, as well as performs drayage services, including pickup and delivery of intermodal shipments; and trucking dispatch services. In addition, the company serves the automotive industry with various distribution centers and storage locations; and connects non-rail served customers through transferring products from rail to trucks, such as plastics and ethanol. Further, it is involved in the acquisition, development, sale, lease, and management of real estate properties. The company operates approximately 21,000 route mile rail network, which serves various population centers in 23 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec, as well as owns and leases approximately 4,000 locomotives. It also serves production and distribution facilities through track connections. The company was founded in 1978 and is based in Jacksonville, Florida. (Summary) (Company) (Daily Chart)
| 19 April 2015 Price $33.30 1yr Target $36.17 Analysts 23 1yr Cap Gain 8.61% Dividend $0.72 Yield 2.16% 1yr Est Tot Return 10.77% 3yr DivGR 12.01% 5yr DivGR 16.51% P/E 16.82 PEG 1.70 | Market Cap $32.90 Bil Beta 1.30 EPS (ttm) $1.98 Payout Ratio 36.36% EPS next yr $2.31 Forward P/E 16.82 Debt/Equity 0.86 ROA 7.20% ROE 21.30% ROI 11.90% Sales $12.68 Bil Income $1.97 Bil Profit Margin 15.53% |
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