Canadian National Railway (NYSE:CNI) & Norfolk Southern (NYSE:NSC) Head to Head Contrast

Canadian National Railway (NYSE:CNI) and Norfolk Southern (NYSE:NSC) are both large-cap industrials companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, valuation, earnings, risk and institutional ownership.

Dividends

Canadian National Railway pays an annual dividend of $2.60 per share and has a dividend yield of 2.1%. Norfolk Southern pays an annual dividend of $5.40 per share and has a dividend yield of 1.6%. Canadian National Railway pays out 45.3% of its earnings in the form of a dividend. Norfolk Southern pays out 45.3% 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. Canadian National Railway has raised its dividend for 3 consecutive years. Canadian National Railway is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

80.7% of Canadian National Railway shares are held by institutional investors. Comparatively, 75.1% of Norfolk Southern shares are held by institutional investors. 2.4% of Canadian National Railway 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 large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations and price targets for Canadian National Railway and Norfolk Southern, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian National Railway	0	10	9	0	2.47
Norfolk Southern	0	14	7	0	2.33

Canadian National Railway presently has a consensus target price of $138.76, suggesting a potential upside of 9.46%. Norfolk Southern has a consensus target price of $348.81, suggesting a potential upside of 6.46%. Given Canadian National Railway’s stronger consensus rating and higher probable upside, equities analysts plainly believe Canadian National Railway is more favorable than Norfolk Southern.

Risk and Volatility

Canadian National Railway has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, Norfolk Southern has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Profitability

This table compares Canadian National Railway and Norfolk Southern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian National Railway	26.42%	22.82%	8.29%
Norfolk Southern	20.70%	18.22%	6.46%

Valuation & Earnings

This table compares Canadian National Railway and Norfolk Southern”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian National Railway	$12.38 billion	6.17	$3.38 billion	$5.74	22.08
Norfolk Southern	$12.18 billion	6.04	$2.87 billion	$11.93	27.46

Canadian National Railway has higher revenue and earnings than Norfolk Southern. Canadian National Railway is trading at a lower price-to-earnings ratio than Norfolk Southern, indicating that it is currently the more affordable of the two stocks.

Summary

Canadian National Railway beats Norfolk Southern on 13 of the 17 factors compared between the two stocks.

About Canadian National Railway

Canadian National Railway, commonly known as CN, is a North American transportation and logistics company that operates a freight rail network connecting Canada’s Atlantic, Pacific and Gulf coasts with the United States. Its network serves customers across Canada and the U.S. Midwest and South. CN transports a range of commodities and manufactured goods, including intermodal shipments, grain and fertilizers, petroleum and chemicals, forest products, metals and minerals, and finished vehicles. The company also provides services such as rail-connected logistics and supply-chain solutions.

About Norfolk Southern

Norfolk Southern Corporation is a freight transportation company that operates a major railroad network across the eastern United States. Its rail services connect businesses, ports and communities, and link with other railroads to move goods across North America. The company transports a broad range of products, including coal, chemicals, agricultural goods, automotive vehicles and parts, metals, construction materials and consumer products. Its services include intermodal transportation, which combines rail with truck or container shipping, as well as rail freight and logistics solutions.