Coal transported to power plants was one of the significant use-cases for railroad transportation. However, with commitments like the Paris Climate Agreement and a greater push towards sustainability, the use of coal in generating power is expected to go down. Naturally, this trend has raised concerns about the prospects of railroad companies. However, investors looking for the best railroad stocks to buy now may want to note that rail transportation is more carbon-friendly than other popular modes of freight transport. Plus, railroad stocks offer a hedge against rising energy prices, something that cannot be ruled out given the concerns about high inflation in a post-pandemic world. If you want to consider investing in railroad stocks, companies like CSX Corporation and Canadian Pacific are worth considering.
Price Action Of CSX Corporation
If you look at the long-term monthly chart for CSX, you will notice an exponential curve trending up. On a logarithmic scale, the chart will resemble a linear upward sloping line. Both these views indicate a positive price action pattern. The prices are making higher tops and higher bottoms. While the revenues for CSX haven’t grown much over the last ten years, the net income has risen significantly. It went from $1.8 billion in 2011 to $5.4 billion in 2017 before coming down to $2.7 billion in 2020. Gross margins had dipped to 30% in 2015, but they are now back up to over 40%. Dividends have gone up from $0.37 per share in 2011 to $1.04 in 2020. CSX Corporation is one of the best railroad stocks to invest in.
CSX Corporation’s stock closed at $98.87 on 15th April 2021. It was up 7.5% over the preceding month. The past year has been a decent one for CSX, with the stock up 63% over the 12 months before 15th April. Meanwhile, Canadian Pacific Railway’s stock is down about 1.1% for the month, having closed at $370.53 on 15th April 2021.