Exploring the Sustainability and Growth of Norfolk Southern Corp's Dividends
Norfolk Southern Corp (NSC, Financial) recently announced a dividend of $1.35 per share, payable on 2024-05-20, with the ex-dividend date set for 2024-05-02. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Norfolk Southern Corp's dividend performance and assess its sustainability.
What Does Norfolk Southern Corp Do?
Class-I railroad Norfolk Southern operates in the Eastern United States. On more than 20,000 miles of track, the rail hauls shipments of coal, intermodal traffic, and a diverse mix of automobile, agriculture, metal, chemical, and forest products.
A Glimpse at Norfolk Southern Corp's Dividend History
Norfolk Southern Corp has maintained a consistent dividend payment record since 1986, distributing dividends on a quarterly basis. The company has increased its dividend each year since 2001, earning it the status of a dividend achiever, a title given to companies that have increased their dividends annually for at least the past 23 years.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Norfolk Southern Corp's Dividend Yield and Growth
Norfolk Southern Corp currently boasts a 12-month trailing and forward dividend yield of 2.32%, indicating stable expected dividend payments over the next year. Over the past three years, the company's annual dividend growth rate was 12.80%, which decreased slightly to 11.90% over a five-year period, and stands at 10.60% over the past decade. The 5-year yield on cost for Norfolk Southern Corp stock is approximately 4.07%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Norfolk Southern Corp's dividend payout ratio is currently 0.49, suggesting a strong balance between distributing earnings as dividends and retaining funds for future growth. The company's profitability rank is 8 out of 10, indicating good profitability prospects based on a decade of positive net income.
Growth Metrics: The Future Outlook
Norfolk Southern Corp's growth rank is 8 out of 10, highlighting a strong growth trajectory. The company's revenue and earnings growth rates are robust, with a 3-year revenue growth rate of approximately 11.90% and a 3-year EPS growth rate of approximately 8.30%. Additionally, the 5-year EBITDA growth rate of 5.90% further supports the sustainability of its dividends.
Conclusion: Is Norfolk Southern Corp's Dividend a Safe Bet?
Considering Norfolk Southern Corp's consistent dividend growth, stable payout ratio, strong profitability, and solid growth metrics, the company appears well-positioned to maintain its dividend payments. Investors seeking stable dividend income might find Norfolk Southern Corp an attractive option. How do you assess the balance between dividend safety and growth potential in your investment choices?
GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
