Here's Why Investors Should Retain CSX Amid Risks
Zacks Investment Research | Jun 29, 2017 09:19PM ET
On Jun 29, 2017, we issued an updated research report on Jacksonville, FL-based, CSX Corp. (NASDAQ:CSX) . Over the past three months, the stock price of the company has inched up 15.62%, outperforming the Zacks categorized Transportation-Rail industry’s gain of 7.36%.
The company currently carries a Zacks Rank #3 (Hold). You can see .
CSX is a leading provider of rail, container-shipping, intermodal and logistics services. It is benefiting from a recent improvement in the coal-related scenario, which has been aiding overall volume growth. The company is also putting in notable efforts to control costs. Volume growth is expected in the second quarter as well. Driven by improved efficiencies, the company expects the bottom line to expand 25% in 2017 on a year-over-year basis.
CSX announced 11% dividend hike earlier this year in its quarterly dividend payout. Following the announcement, the new quarterly dividend is an impressive $0.20 per share. It is to be noted that the company’s dividend has increased 13 times since 2005.
In Mar 2017, the company announced, that it has inked a deal with Paul Hilal's Mantle Ridge hedge fund. As part of the agreement, CSX appointed E. Hunter Harrison as its chief executive officer (CEO). Harrison had served as CEO for fellow railroad operator Canadian Pacific Railway Limited (NYSE:CP) as well. The appointment is discreet as CSX remains focused on improving its fortunes. In a shareholder-friendly move, the company’s board cleared a new $1 billion share buyback program. Management expects to complete the new program by Mar 31, 2018.
However, CSX’s high debt levels raise concerns. Moreover, the company continues to face challenges from a strong U.S. dollar which might impact its bottom line.
Stocks to Consider
Investors interested in the railroad space may also consider Alstom (PA:ALSO) ADR (OTC:ALSMY) carrying a Zacks Rank #2 (Buy). Investors interested in the broader transportation space may also consider United Continental Holdings (NYSE:UAL) , which also carries Zacks Rank #2 (Buy).
5 Trades Could Profit "Big-League" from Trump Policies
if the stocks above spark your interest, wait until you look into companies primed to make substantial gains from Washington's changing course.
Today Zacks reveals 5 tickers that could benefit from new trends like streamlined drug approvals, tariffs, lower taxes, higher interest rates, and spending surges in defense and infrastructure. Original post
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.