Are Railroad Stocks the Best Way to Benefit from the Remodeling Boom in the United States?

Rebounding from The Great Recession, the revitalized housing market in the United States has rewarded the shareholders of railroad stocks, such as Union Pacific UNP, CSX CSX, and Norfolk Southern NSC.

The most economical form of hauling industrial goods and other supplies needed for commercial and residential construction, these railroad stocks have surged from greater activity in housing.

This should continue with the projected increase in remodeling. According to the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, double-digit growth is expected for the first half of 2014. The lumber, appliances, cement, roofing materials, and other products needed for remodeling are often times carried by railroads across the United States from ports and factories to the final destination.

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That can be seen in the stock performance of railroad companies.

Over the last year of market action, CSX has soared by more than 44 percent. For the same period, Union Pacific rose by more than 30 percent. Norfolk Southern chugged along higher by over 43 percent for the last twelve months.

Due to the economic recovery from The Great Recession, Wall Street expects that bullish performance to continue.

Now trading just under $88 a share, the mean analyst target price for Norfolk Southern for the next year of trading is $95.19. At around $27.20, CSX is expected to rise to $29.13 a share. Union Pacific is projected to jump from around $168.15 to $178.57 by the analyst community.