Guangshen Railway (OTCMKTS:GSHHY) and Norfolk Southern (NYSE:NSC) are both transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Guangshen Railway and Norfolk Southern, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Guangshen Railway 0 0 0 0 N/A
Norfolk Southern 2 6 14 1 2.61

Norfolk Southern has a consensus target price of $224.28, indicating a potential downside of 11.87%. Given Norfolk Southern’s higher possible upside, analysts plainly believe Norfolk Southern is more favorable than Guangshen Railway.

Risk and Volatility

Guangshen Railway has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500. Comparatively, Norfolk Southern has a beta of 1.41, suggesting that its stock price is 41% more volatile than the S&P 500.

Profitability

This table compares Guangshen Railway and Norfolk Southern’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Guangshen Railway -3.40% -2.18% -1.72%
Norfolk Southern 20.27% 15.83% 6.26%

Dividends

Guangshen Railway pays an annual dividend of $0.36 per share and has a dividend yield of 3.8%. Norfolk Southern pays an annual dividend of $3.76 per share and has a dividend yield of 1.5%. Norfolk Southern pays out 36.4% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Guangshen Railway and Norfolk Southern’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Guangshen Railway $3.04 billion 0.44 $107.51 million N/A N/A
Norfolk Southern $11.30 billion 6.18 $2.72 billion $10.34 24.61

Norfolk Southern has higher revenue and earnings than Guangshen Railway.

Insider & Institutional Ownership

0.6% of Guangshen Railway shares are owned by institutional investors. Comparatively, 62.3% of Norfolk Southern shares are owned by institutional investors. 71.4% of Guangshen Railway shares are owned by insiders. Comparatively, 0.3% of Norfolk Southern shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Norfolk Southern beats Guangshen Railway on 12 of the 15 factors compared between the two stocks.

About Guangshen Railway

Guangshen Railway Company Limited engages in the railway passenger and freight transportation business in the People's Republic of China. The company's passenger transportation services include the operation of Guangzhou-Shenzhen inter-city express trains, long-distance trains, and Guangzhou-Hong Kong city through trains. Its freight transportation services comprise the transportation of full load and single load cargo, containers, bulky and heavy cargo, dangerous goods, perishable goods, and oversized cargo. The company also provides railway network usage services; and other transportation-related services, such as railway operation, locomotive and passenger car leasing, passenger service, and luggage transportation services, as well as sells food, beverages, and merchandise on board the trains and in railway stations. In addition, it is involved in train repair, on-board catering, materials and supplies sale, goods sale, cargo loading and unloading, and other businesses related to railway transportation. Further, the company offers warehousing, hotel management, and real estate construction services. As of December 31, 2019, it operated 246.5 pairs of passenger trains on a daily basis, including 105 pairs of Guangzhou-Shenzhen inter-city trains, 10 pairs of Hong Kong through Trains, and 131.5 pairs of long-distance trains. The company was founded in 1996 and is based in Shenzhen, the People's Republic of China.

About Norfolk Southern

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The company transports industrial products, including chemicals, agriculture, and metals and construction materials; and coal, automobiles, and automotive parts. It also transports overseas freight through various Atlantic and Gulf Coast ports; and provides commuter passenger services. As of December 31, 2019, the company operated approximately 19,500 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is based in Norfolk, Virginia.

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