Yahoo Finance If You Invested $1000 in CSX a Decade Ago, This is How Much It'd Be Worth Now
For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in CSX (CSX) ten years ago? It may not have been easy to hold on to CSX for all that time, but if you did, how much would your investment be worth today?
CSX's Business In-Depth
With that in mind, let's take a look at CSX's main business drivers.
CSX Corporation is one of United States’ leading transportation companies. The company, based in Jacksonville, Fl, offers rail-based freight transportation services like traditional rail service, transport of intermodal containers and trailers apart from rail-to- truck transfers.
CSX, incorporated in 1978 under Virginia law, offers customers access to a large and interconnected transportation network. The company's fiscal year coincides with the calendar year.
CSX Transportation is the company’s primary operating subsidiary. Through the subsidiary, the company provides an important link to the transportation supply chain through its rail network, spanning across approximately 19,500 route miles. CSXT also offers service to multiple production and distribution facilities apart from managing activities like real estate sales .
Through this vast network, the company offers services to major population centers in 23 states east of the Mississippi River, the District of Columbia and Ontario and Quebec in Canada. CSX owns multiple locomotives. Freight, switching and auxiliary units are present in the locomotive fleet. CSX also leases locomotives on a short-term basis.
CSX conducts its operations primarily through five business lines:
Merchandise (accounted for 55% of total revenue in 2022): The merchandise business consists of one million carloads per year of aggregates, which include crushed stone, sand and gravel, metal, phosphate, fertilizer, food, consumer (manufactured goods and appliances), agricultural, paper and chemical products.
Coal (16%): The segment delivers carloads of coal, coke and iron ore to electricity generating power plants, ocean, river and lake piers and terminals, steel makers apart from industrial plants.
Intermodal (16%): Through its network of approximately 30 terminals, Intermodal serves all the major markets east of the Mississippi River and transports, mainly manufactured consumer goods in containers, thereby providing customers truck-like service for longer shipments.
Trucking (7%): Introduced in third-quarter 2021, the segment consists of the operations of Quality Carriers, which was acquired in July 2021.
Other (6%): The segment, introduced in the second quarter of 2010, includes revenue from regional subsidiary railroads and incidental charges.
Bottom Line
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in CSX a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in May 2013 would be worth $3,748.84, or a gain of 274.88%, as of May 19, 2023, and this return excludes dividends but includes price increases.
The S&P 500 rose 151.76% and the price of gold increased 38.74% over the same time frame in comparison.
Looking ahead, analysts are expecting more upside for CSX.
CSX expects revenue ton miles in 2023 to grow in low single digits in 2023 driven by strong anticipated performances in the merchandise and coal units. To counter inflationary pressures, the railroad operator aims to improve efficiencies. In first-quarter 2023, operating ratio (operating expenses as a % of revenues) improved to 60.5% from 62.4% a year ago due to lower costs. We are also impressed by CSX's efforts to reward its shareholders through dividends and buybacks. In February 2023, CSX upped its dividend by 10% to 11 cents per share. However, supply-chain disturbances are hurting CSX's operations. Elevated capital expenditures are also worrisome. CSX's management expects current-year capex to be approximately $2.3 billion, which is higher than 2022 actuals.
The stock is up 5.13% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 9 higher, for fiscal 2023. The consensus estimate has moved up as well.
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