Best Railroad Stocks

Take a look at the rail stocks below for some inspiration.

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Contributor, Benzinga
May 31, 2023

Norfolk Southern (NYSE:NSC)

Norfolk Sothern is a real estate company. It provides its customers with a convenient way to purchase or lease land, offers land to the railroad or manages and develops land or natural resources on railroad property. The company also offers services such as property sales, property lease, laying the pipeline, fiber optics, property access, private crossings, signboards and natural resource management.

The real estate stock has a market cap of $54 billion and has an EPS of $8.04. It has an annual dividend yield of $3.76 per share. Norfolk Southern has high liquidity and trades over 801,000 shares per day. It has $11 billion in 2019.

Last update: 3:59PM (Delayed 15-Minutes)
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Vol / Avg.1.059M / 1.164MMkt Cap45.982B
Day Range200.645 - 204.86052 Wk Range194.050 - 261.580

Canadian National Railway (NYSE:CNI)

Canadian National Railway Company is a leading North American transportation and logistics company. It transports a wide range of goods including raw materials, manufactured products and consumer goods. Canadian National Railway Company has routed 19,500 miles of tracks connecting 3 coasts in North America.

The real estate stock has a market cap of $74 billion and has an EPS of $3.80. It has an annual dividend yield of $1.753 per share. Canadian National Railway Company has high liquidity and trades more than 663,000 shares per day. It generated revenue of $8 billion in 2019.

Last update: 3:59PM (Delayed 15-Minutes)
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Vol / Avg.1.025M / 1.121MMkt Cap72.214B
Day Range109.430 - 110.73052 Wk Range103.810 - 129.850

Werner Enterprises (NASDAQ:WERN)

Invest in Werner if you are bullish on the relationship between China and the United States. Werner is built on intrastate commerce, especially in shipping general commodities between North America and Asia. It also participates in the short-haul market with a fleet of over 8,000 trucks and 24,000 company-owned trailers.

Werner was another company that shot past all-time highs during the coronavirus recovery — another indication of the strength of the industry and investor belief in recovery.

Last update: 4:00PM (Delayed 15-Minutes)
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Vol / Avg.631.180K / 599.493KMkt Cap2.486B
Day Range39.080 - 39.89052 Wk Range35.840 - 50.310

Union Pacific (NYSE:UNP)

Union Pacific is one of the most well-established railroad companies on the market, with 32,340 miles of networked rail lines linking the farthest corners of the U.S. After the coronavirus hit, UNP was one of the slower tickers to recover. This improves the dividend ratio and leaves room for growth for investors who believe that railroads will continue to expand with the consumer market recovery.

Union Pacific has a strong connection to the agricultural products industry. Any increase in the need for commodities should do well for this stock. The lower need for food and fertilizers in 2020 post-coronavirus America may be what is causing this stock to lag its peers. If you are betting on a hospitality industry recovery in 2021, it’s Union Pacific trains that will be bringing in the cargo.

Last update: 3:59PM (Delayed 15-Minutes)
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Vol / Avg.2.417M / 2.693MMkt Cap127.443B
Day Range208.750 - 213.02552 Wk Range183.690 - 240.480

Trinity Industries (NYSE:TRN)

Trinity Industries Inc. sells and leases railroad products and railcar maintenance services in North America. The company operates under the name TrinityRail in three main segments: railcar leasing and management services, which owns railcars and provides fleet management and administration services; rail products, which builds, sells, and modifies freight and tank railcars and their components; and all other, which sells highway products such as guardrail and other highway barriers. Customers include railroads, leasing companies, and shipping companies in the industries of agriculture, construction, consumer products, energy, and chemicals.

Last update: 3:59PM (Delayed 15-Minutes)
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Vol / Avg.400.661K / 330.281KMkt Cap2.070B
Day Range24.990 - 25.57052 Wk Range20.071 - 31.675

Railroad stocks are some of the most established securities in our investment market. Railroads were the major form of commercial transport during the Industrial Revolution and they remain essential to the world’s consumer economy today even in a world of drone delivery and space flight. If you’re looking for railroad stock under $10, this may not be the industry for you. 

Railroad stocks have traditionally been a haven for cash-flow investors and are well known for their steady dividends. This may have been the reason Warren Buffett continued to hold Berkshire Hathaway’s position in BNSF Railway Co. even as he wholly dumped other transportation industry stocks during the coronavirus pandemic. However, many investors are taking advantage of macroeconomic shocks and new technologies to pull capital gains out of railroad investments.

Remember, railroad operators are still essential to the supply chain and the economy on the whole. Every investor has seen a train pass by during their daily commute, and those trains often bring the products you need to your city. However, railroads have issues with revenue generation because the network isn’t growing and the locomotives are getting older. How can investors split the difference and avoid losses?

Quick Look at the Best Railroad Stock:

Overview: Railroad Stocks

Railroad stocks were the dominant trading security during the 1800s. Mohawk & Hudson, the first railroad stock, was traded on the NYS&EB, a precursor to the New York Stock Exchange (NYSE). Speculation on railroad stocks caused the failure of Jay Cooke & Company, a prominent Philadelphia finance firm in 1873. The NYSE shut down for 10 days in the aftermath. Over the next few decades, railroad stocks would be an essential component in funding railroads and creating the fortunes of the Vanderbilts, the Goulds and the Huntingtons. 

Consumer service has always held the bottomline steady in railroading, but technology has always driven its growth. The railroad companies providing investors with great returns today are incorporating precision scheduled railroading (PSR). PSR allows more efficient asset utilization, which improves the operating ratio and overall profitability. Higher efficiency also shields the company from the losses in revenue that usually correspond with economic downturns. This leads to better earnings per share and higher investor returns.

Remember, however, that railroad stocks can be quite volatile. Yes, Warren Buffett made quite a lot of money in this sector, but the industry could go south at any time. Plus, if progressive policies calling for high-speed rail prevail, it’s more likely that the industry will surge that much more. If not, it’s possible that companies like UPS and FedEx could enhance their air fleets and push for air cargo to make a dent in the railroad sector.

Best Online Brokers for Railroad Stocks

Because railroad companies were established as a cornerstone of the stock market, they are all usually available on the majority of online brokers. Even if you are in the U.S., you can easily invest in railroads based in Canada or Hong Kong. Railroads were essential in building the international connection among securities markets in different countries. That relationship is far too established to easily break.

Because you can find your chosen railroad stocks on virtually any broker, you have more leverage to choose that broker based on its individual idiosyncrasies. No matter how good your chosen stock may be, you still need great execution to make profits in the stock market. You get great execution from the tools your broker provides.

Take a look at this online broker comparison table and choose based on the features that complement your trading style.

  • securely through Centerpoint Securities's website
    securely through Centerpoint Securities's website
    Best For:
    Momentum traders
    Read Review
  • Securely through Interactive Brokers’ website
    Securely through Interactive Brokers’ website
    Best For:
    Active and Global Traders
    Read Review
  • securely through Magnifi's website
    securely through Magnifi's website
    Best For:
    AI Investing
    Read Review
  • securely through Webull's app
    securely through Webull's app
    Best For:
    Intermediate Traders and Investors
    Read Review
  • securely through TD Ameritrade's website
    securely through TD Ameritrade's website
    Best For:
    Retirement Savers
    Read Review
  • securely through Plus500's website
    securely through Plus500's website
    Best For:
    Mobile Users
    Read Review

    86% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.

Features to Look for in Railroad Stock

Here are some important features to look for in railroad stocks.

  1. Rail line mileage: The more rail line mileage a company has in its control, the more access it has to deliver goods. More mileage also means less congestion on its tracks, so goods move faster.
  2. Dividend history: Railroad companies are known for steady dividends. Whether you want a growth stock or not, you should always look for a company to hold or increase its dividends over time in this industry.
  3. Implementing technology: The railroad industry is consistently updating its technology. To stay competitive, companies must keep abreast of more efficient ways to transport goods and conduct operations.
  4. Economic health: Stocks tend to grow with the economy, and with railroads serving as the backbone of the logistics industry, poor economic performance could lead to poor stock performance in this sector.

I’ve Been Working on My Profits

Unless you bought during the lowest point in the March lows, you won’t find any railroad stocks under $5. You can still find great deals with leverage for capital gains and dividends. We may see new highs for the entire industry as the U.S. goes back to work after social distancing. If not, investors have a steady dividend to fall back on.

Frequently Asked Questions


Are railroad stocks worth it?


Railroad stocks can be worth the investment, but you must do your research and understand how the overall market is performing.


Are railroad stocks expensive?


Stocks across a large industry will vary widely in price. Railroad stocks could be considered cheap or expensive depending on their situation and how the market is moving.


What are the best railroad stocks?


Check out Benzinga’s list of recommended railroad stocks on the list above.