By Rob Otman
CSX (Nasdaq: CSX) is a large cap company that operates within the road & rails industry. Its market cap is $47 billion today and the total one-year return is 93.69% for shareholders.
CSX stock is beating the market, but does that make it a good buy today? To answer this question we’ve turned to the Investment U Stock Grader. Our research team built this system to diagnose the financial health of a company.
Our system looks at six key metrics…
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Earnings-per-Share (EPS) Growth: CSX reported a recent EPS growth rate of 5.41%. That’s above the road & rail industry average of -7.41%. That’s a great sign. CSX Corp’s earnings growth is outpacing competitors.
Price-to-Earnings (P/E): The average price-to-earnings ratio of the road & rail industry is 24.83. And CSX’s ratio comes in at 26.14. Its valuation looks expensive compared to many of its competitors.
Debt-to-Equity: The debt-to-equity ratio for CSX stock is 96.79%. That’s below the road & rail industry average of 211.11%. The company is less leveraged.
Free Cash Flow per Share Growth: CSX’s FCF has been lower than its competitors over the last year. That’s not good for investors. In general, if a company is growing its FCF, it will be able to pay down debt, buy back stock, pay out more in dividends and/or invest money back into the business to help boost growth. It’s one of our most important fundamental factors.
Profit Margins: The profit margin of CSX comes in at 12.62% today. And generally, the higher, the better. We also like to see this margin above that of its competitors. CSX’s profit margin is above the road & rail average of 11.06%. So that’s a positive indicator for investors.
Return on Equity: Return on equity gives us a look at the amount of net income returned to shareholders. The ROE for CSX is 14.8%, and that’s above its industry average ROE of 12.7%.
CSX stock passes four of our six key metrics today. That’s why our Investment U Stock Grader rates it as a buy with caution.
Please note that our fundamental factor checklist is just the first step in performing your own due diligence. There are many other factors you should consider before investing. That’s why The Oxford Club offers more than a dozen newsletters and trading advisories all aimed at helping investors grow and maintain their wealth. For more details, click here.
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Source:: Investment You
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