Dividends4Life: 3 Railroad Stocks for Steady Dividends & Growth

3 Railroad Stocks for Steady Dividends & Growth

Posted by D4L | Wednesday, November 05, 2014 | | 1 comments »

Value investors looking for stable buy-and-hold stocks that offer reliable income will find a lot to love in freight railroad stocks. While the industry does face potential headwinds with declining coal volumes, the best railroad stocks are a play on the rebounding economy and the shale oil and gas boom. Coal once was the lifeblood of freight railroads, but as energy companies turned to cleaner power generation, King Coal has been supplanted by natural gas. While the decline in coal shipments has had an impact of railroad revenues, the recent shale oil and gas boom is helping offset that lost business.

Shippers, however, do not have a lot of alternatives. Trucking industry capacity is extremely tight and railroads can move a ton of freight 476 miles on a single gallon of diesel fuel. Railroads offer a cost effective alternative to trucks particularly in the intermodal segment — freight that is shipped in containers. That said, here are three railroad stocks to ride now: CSX (CSX), Norfolk Southern (NSC) and Union Pacific (UNP).

Source: InvestorPlace

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1 comments

  1. Goosemann Jones // November 9, 2014 at 3:50 PM

    Hi, Dividends 4 Life.
    It doesn't get much more boring than the rails … and that's what's great about them. I have a small position in NSC and would certainly buy more if the price would ease back down. GE is another company that is benefitting from the growth in rail traffic that I have my eye on. Thanks for the article.

    Goosemann Jones
    Flight to Dividends Blog

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