Analyzing CSX (NASDAQ:CSX) and West Japan Railway (OTCMKTS:WJRYY)

CSX (NASDAQ:CSX) and West Japan Railway (OTCMKTS:WJRYY) are both large-cap transportation companies, but which is the better business? We will contrast the two companies based on the strength of their risk, institutional ownership, earnings, dividends, valuation, analyst recommendations and profitability.

Volatility and Risk

CSX has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, West Japan Railway has a beta of 0.37, suggesting that its stock price is 63% less volatile than the S&P 500.

Institutional & Insider Ownership

73.6% of CSX shares are held by institutional investors. 0.4% of CSX shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for CSX and West Japan Railway, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CSX	0	6	15	1	2.77
West Japan Railway	0	0	0	0	0.00

CSX presently has a consensus target price of $37.00, suggesting a potential upside of 4.46%. Given CSX’s stronger consensus rating and higher probable upside, research analysts plainly believe CSX is more favorable than West Japan Railway.

Valuation & Earnings

This table compares CSX and West Japan Railway”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CSX	$14.54 billion	4.54	$3.47 billion	$1.62	21.86
West Japan Railway	$11.22 billion	0.91	$752.13 million	$1.59	13.70

CSX has higher revenue and earnings than West Japan Railway. West Japan Railway is trading at a lower price-to-earnings ratio than CSX, indicating that it is currently the more affordable of the two stocks.

Dividends

CSX pays an annual dividend of $0.52 per share and has a dividend yield of 1.5%. West Japan Railway pays an annual dividend of $0.51 per share and has a dividend yield of 2.3%. CSX pays out 32.1% of its earnings in the form of a dividend. West Japan Railway pays out 32.1% 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. CSX has increased its dividend for 21 consecutive years. West Japan Railway is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares CSX and West Japan Railway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CSX	21.92%	25.48%	7.41%
West Japan Railway	6.66%	9.01%	3.07%

Summary

CSX beats West Japan Railway on 16 of the 18 factors compared between the two stocks.

About CSX

CSX Corporation, together with its subsidiaries, provides rail-based freight transportation services. The company offers rail services; and transportation of intermodal containers and trailers, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations. It also transports chemicals, agricultural and food products, minerals, automotive, forest products, fertilizers, and metals and equipment; and coal, coke, and iron ore to electricity-generating power plants, steel manufacturers, and industrial plants, as well as exports coal to deep-water port facilities. In addition, the company provides intermodal services through a network of approximately 30 terminals transporting manufactured consumer goods in containers; and drayage services, including the pickup and delivery of intermodal shipments. It serves the automotive industry with distribution centers and storage locations, as well as connects non-rail served customers through transferring products, such as plastics and ethanol from rail to trucks. The company operates approximately 20,000 route mile rail network, which serves various population centers in 26 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec, as well as owns and leases approximately 3,500 locomotives. It serves production and distribution facilities through track connections. CSX Corporation was incorporated in 1978 and is headquartered in Jacksonville, Florida.

About West Japan Railway

West Japan Railway Company provides railway transport services in Japan. The company operates through Mobility, Retail, Real Estate, Travel and Regional Solutions, and Other segments. The Mobility segment provides passenger transportation, station operation and management, cleaning and maintenance, construction, machinery and equipment installation, rolling stock and other facility construction services, as well as engages in the railway operations and electric works. The Retail segment sells goods; offers food and other wholesale operation services; and operates department stores. The Real Estate segment sells and leases real estate properties, as well as operates shopping centers and hotels. The Travel and Regional Solutions segment provides travel agency and regional solutions. The Other segment engages in the advertising and other businesses. The company is also involved in the operation of convenience stores, restaurants, and souvenir shops; and provision of credit cards and electronic money services. The company was incorporated in 1987 and is based in Osaka, Japan.