Old Dominion Freight Line (NASDAQ:ODFL – Get Free Report) and Norfolk Southern (NYSE:NSC – Get Free Report) are both large-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, valuation, risk, earnings, dividends, analyst recommendations and institutional ownership.
Institutional and Insider Ownership
77.8% of Old Dominion Freight Line shares are held by institutional investors. Comparatively, 75.1% of Norfolk Southern shares are held by institutional investors. 8.2% of Old Dominion Freight Line shares are held by company insiders. Comparatively, 0.1% of Norfolk Southern shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Analyst Recommendations
This is a summary of current ratings and target prices for Old Dominion Freight Line and Norfolk Southern, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Old Dominion Freight Line | 2 | 13 | 9 | 1 | 2.36 |
| Norfolk Southern | 0 | 15 | 7 | 0 | 2.32 |
Risk and Volatility
Old Dominion Freight Line has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, Norfolk Southern has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.
Profitability
This table compares Old Dominion Freight Line and Norfolk Southern’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Old Dominion Freight Line | 19.44% | 24.87% | 19.47% |
| Norfolk Southern | 21.02% | 18.21% | 6.34% |
Valuation and Earnings
This table compares Old Dominion Freight Line and Norfolk Southern”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Old Dominion Freight Line | $5.50 billion | 7.01 | $1.02 billion | $5.19 | 35.81 |
| Norfolk Southern | $12.18 billion | 6.07 | $2.87 billion | $11.72 | 28.08 |
Norfolk Southern has higher revenue and earnings than Old Dominion Freight Line. Norfolk Southern is trading at a lower price-to-earnings ratio than Old Dominion Freight Line, indicating that it is currently the more affordable of the two stocks.
Dividends
Old Dominion Freight Line pays an annual dividend of $1.16 per share and has a dividend yield of 0.6%. Norfolk Southern pays an annual dividend of $5.40 per share and has a dividend yield of 1.6%. Old Dominion Freight Line pays out 22.4% of its earnings in the form of a dividend. Norfolk Southern pays out 46.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Old Dominion Freight Line has raised its dividend for 5 consecutive years.
Summary
Old Dominion Freight Line beats Norfolk Southern on 12 of the 18 factors compared between the two stocks.
About Old Dominion Freight Line
Old Dominion Freight Line, Inc. operates as a less-than-truckload motor carrier in the United States and North America. The company offers regional, inter-regional, and national less-than-truckload services, as well as expedited transportation. It also provides various value-added services, including container drayage, truckload brokerage, and supply chain consulting. As of December 31, 2023, it owned and operated 10,791 tractors, 31,233 linehaul trailers, and 15,181 pickup and delivery trailers; 46 fleet maintenance centers; and 257 service centers. Old Dominion Freight Line, Inc. was founded in 1934 and is headquartered in Thomasville, North Carolina.
About Norfolk Southern
Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The company transports agriculture, forest, and consumer products comprising soybeans, wheat, corn, fertilizers, livestock and poultry feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper products, wood fibers, wood pulp, beverages, and canned goods; chemicals consist of sulfur and related chemicals, petroleum products comprising crude oil, chlorine and bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, sand, and natural gas liquids; metals and construction materials, such as steel, aluminum products, machinery, scrap metals, cement, aggregates, minerals, clay, transportation equipment, and military-related products; and automotive, including finished motor vehicles and automotive parts, as well as coal. It also transports overseas freight through various Atlantic and Gulf Coast ports; and operates an intermodal network. As of December 31, 2023, the company operated approximately 19,100 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is headquartered in Atlanta, Georgia.
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