Contrasting Norfolk Southern (NYSE:NSC) and Old Dominion Freight Line (NASDAQ:ODFL)

Norfolk Southern (NYSE:NSC) and Old Dominion Freight Line (NASDAQ:ODFL) are both large-cap industrials companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, dividends, profitability, risk, earnings, analyst recommendations and institutional ownership.

Profitability

This table compares Norfolk Southern and Old Dominion Freight Line’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norfolk Southern	21.02%	18.21%	6.34%
Old Dominion Freight Line	19.44%	24.87%	19.47%

Risk & Volatility

Norfolk Southern has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, Old Dominion Freight Line has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.

Valuation & Earnings

This table compares Norfolk Southern and Old Dominion Freight Line”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norfolk Southern	$12.18 billion	6.12	$2.87 billion	$11.72	28.30
Old Dominion Freight Line	$5.50 billion	7.06	$1.02 billion	$5.19	36.08

Norfolk Southern has higher revenue and earnings than Old Dominion Freight Line. Norfolk Southern is trading at a lower price-to-earnings ratio than Old Dominion Freight Line, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Norfolk Southern and Old Dominion Freight Line, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norfolk Southern	0	15	7	0	2.32
Old Dominion Freight Line	2	13	9	1	2.36

Norfolk Southern currently has a consensus target price of $348.00, indicating a potential upside of 4.92%. Old Dominion Freight Line has a consensus target price of $226.55, indicating a potential upside of 20.98%. Given Old Dominion Freight Line’s stronger consensus rating and higher probable upside, analysts clearly believe Old Dominion Freight Line is more favorable than Norfolk Southern.

Insider & Institutional Ownership

75.1% of Norfolk Southern shares are owned by institutional investors. Comparatively, 77.8% of Old Dominion Freight Line shares are owned by institutional investors. 0.1% of Norfolk Southern shares are owned by insiders. Comparatively, 8.2% of Old Dominion Freight Line shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Norfolk Southern pays an annual dividend of $5.40 per share and has a dividend yield of 1.6%. Old Dominion Freight Line pays an annual dividend of $1.16 per share and has a dividend yield of 0.6%. Norfolk Southern pays out 46.1% of its earnings in the form of a dividend. Old Dominion Freight Line pays out 22.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Old Dominion Freight Line has increased its dividend for 5 consecutive years.

Summary

Old Dominion Freight Line beats Norfolk Southern on 12 of the 18 factors compared between the two stocks.

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 agriculture, forest, and consumer products comprising soybeans, wheat, corn, fertilizers, livestock and poultry feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper products, wood fibers, wood pulp, beverages, and canned goods; chemicals consist of sulfur and related chemicals, petroleum products comprising crude oil, chlorine and bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, sand, and natural gas liquids; metals and construction materials, such as steel, aluminum products, machinery, scrap metals, cement, aggregates, minerals, clay, transportation equipment, and military-related products; and automotive, including finished motor vehicles and automotive parts, as well as coal. It also transports overseas freight through various Atlantic and Gulf Coast ports; and operates an intermodal network. As of December 31, 2023, the company operated approximately 19,100 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is headquartered in Atlanta, Georgia.

About Old Dominion Freight Line

Old Dominion Freight Line, Inc. operates as a less-than-truckload motor carrier in the United States and North America. The company offers regional, inter-regional, and national less-than-truckload services, as well as expedited transportation. It also provides various value-added services, including container drayage, truckload brokerage, and supply chain consulting. As of December 31, 2023, it owned and operated 10,791 tractors, 31,233 linehaul trailers, and 15,181 pickup and delivery trailers; 46 fleet maintenance centers; and 257 service centers. Old Dominion Freight Line, Inc. was founded in 1934 and is headquartered in Thomasville, North Carolina.