Critical Contrast: CSX (NASDAQ:CSX) and Guangshen Railway (OTCMKTS:GSHHY)


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CSX (NASDAQ:CSX) and Guangshen Railway (OTCMKTS:GSHHY) are both transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, valuation, earnings, profitability, analyst recommendations, dividends and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
CSX 26.08% 22.83% 7.14%
Guangshen Railway -3.40% -2.18% -1.72%

Insider and Institutional Ownership

73.8% of CSX shares are held by institutional investors. Comparatively, 0.6% of Guangshen Railway shares are held by institutional investors. 0.6% of CSX shares are held by company insiders. Comparatively, 71.4% of Guangshen Railway shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for CSX and Guangshen Railway, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CSX 1 5 18 0 2.71
Guangshen Railway 0 0 0 0 N/A

CSX presently has a consensus target price of $85.81, indicating a potential downside of 9.33%. Given CSX’s higher possible upside, analysts clearly believe CSX is more favorable than Guangshen Railway.

Volatility and Risk

CSX has a beta of 1.18, indicating that its stock price is 18% more volatile than the S&P 500. Comparatively, Guangshen Railway has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Dividends

CSX pays an annual dividend of $1.04 per share and has a dividend yield of 1.1%. Guangshen Railway pays an annual dividend of $0.36 per share and has a dividend yield of 3.8%. CSX pays out 24.9% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares CSX and Guangshen Railway’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
CSX $11.94 billion 6.06 $3.33 billion $4.17 22.70
Guangshen Railway $3.04 billion 0.44 $107.51 million N/A N/A

CSX has higher revenue and earnings than Guangshen Railway.

Summary

CSX beats Guangshen Railway on 11 of the 14 factors compared between the two stocks.

CSX Company Profile

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 transports chemicals, automotive, agricultural and food products, minerals, fertilizers, forest products, 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. The company also offers intermodal transportation services through a network of approximately 30 terminals transporting manufactured consumer goods in containers; drayage services, including the pickup and delivery of intermodal shipments; and trucking dispatch services. It serves the automotive industry with distribution centers and storage locations, as well as connects non-rail served customers through transferring products from rail to trucks, which includes plastics and ethanol. The company operates approximately 20,000 route mile rail network, which serves various population centers in 23 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 3,561 locomotives. It also serves production and distribution facilities through track connections. CSX Corporation was incorporated in 1978 and is headquartered in Jacksonville, Florida.

Guangshen Railway Company Profile

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.

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