Sectors & IndustriesIndustrialsRailroads

Best Railroad Stocks to Buy Now (2023)

Top railroad stocks in 2023 ranked by overall Zen Score. See the best railroad stocks to buy now, according to analyst forecasts for the railroads industry.

According to Zen Score, the 3 best railroad stocks to buy right now are:

Westinghouse Air Brake Technologies (NYSE:WAB) is the top railroad stock with a Zen Score of 46, which is 14 points higher than the railroad industry average of 32. It passed 17 out of 38 due diligence checks and has strong fundamentals. Westinghouse Air Brake Technologies has seen its stock return 16.72% over the past year, overperforming other railroad stocks by 21 percentage points.

Westinghouse Air Brake Technologies has an average 1 year price target of $132.20, an upside of 14.76% from Westinghouse Air Brake Technologies's current stock price of $115.20.

Westinghouse Air Brake Technologies stock has a consensus Strong Buy recommendation according to Wall Street analysts. Of the 5 analysts covering Westinghouse Air Brake Technologies, 60% have issued a Strong Buy rating, 20% have issued a Buy, 20% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Union Pacific (NYSE:UNP) is the second best railroad stock with a Zen Score of 42, which is 10 points higher than the railroad industry average of 32. It passed 15 out of 38 due diligence checks and has strong fundamentals. Union Pacific has seen its stock return 4.09% over the past year, overperforming other railroad stocks by 8 percentage points.

Union Pacific has an average 1 year price target of $250.74, an upside of 13.21% from Union Pacific's current stock price of $221.47.

Union Pacific stock has a consensus Buy recommendation according to Wall Street analysts. Of the 19 analysts covering Union Pacific, 47.37% have issued a Strong Buy rating, 21.05% have issued a Buy, 31.58% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Canadian National Railway Co (NYSE:CNI) is the third best railroad stock with a Zen Score of 40, which is 8 points higher than the railroad industry average of 32. It passed 14 out of 38 due diligence checks and has average fundamentals. Canadian National Railway Co has seen its stock lose -8.63% over the past year, underperforming other railroad stocks by -5 percentage points.

Canadian National Railway Co has an average 1 year price target of $134.00, an upside of 17.12% from Canadian National Railway Co's current stock price of $114.41.

Canadian National Railway Co stock has a consensus Hold recommendation according to Wall Street analysts. Of the 13 analysts covering Canadian National Railway Co, 0% have issued a Strong Buy rating, 7.69% have issued a Buy, 92.31% have issued a hold, while 0% have issued a Sell rating, and 0% have issued a Strong Sell.

Out of 8 railroad stocks that have issued dividends in the past year, the 3 railroad stocks with the highest dividend yields are:

Trinity Industries (NYSE:TRN) has an annual dividend yield of 4.23%, which is 2 percentage points higher than the railroad industry average of 2.11%. Trinity Industries's dividend payout is stable, having never dropped by more than 10% in the last 10 years. Trinity Industries's dividend has shown consistent growth over the last 10 years.

Trinity Industries's dividend payout ratio of 114.3% indicates that its dividend yield might not be sustainable for the long-term.

Greenbrier Companies (NYSE:GBX) has an annual dividend yield of 3.06%, which is 1 percentage points higher than the railroad industry average of 2.11%. Greenbrier Companies's dividend payout is stable, having never dropped by more than 10% in the last 10 years. Greenbrier Companies's dividend has shown consistent growth over the last 10 years.

Greenbrier Companies's dividend payout ratio of 56.9% indicates that its dividend yield is sustainable for the long-term.

Norfolk Southern (NYSE:NSC) has an annual dividend yield of 2.51%, which is the same as the railroad industry average of 2.11%. Norfolk Southern's dividend payout is stable, having never dropped by more than 10% in the last 10 years. Norfolk Southern's dividend has shown consistent growth over the last 10 years.

Norfolk Southern's dividend payout ratio of 57.9% indicates that its dividend yield is sustainable for the long-term.

Railroad stocks were up 0.73% in the last day, and down -0.31% over the last week.

We couldn't find a catalyst for why railroad stocks are up.

Based on WallStreetZen's Valuation Score, the 3 most undervalued railroad stocks right now are:

Trinity Industries (NYSE:TRN) is the most undervalued railroad stock based on WallStreetZen's Valuation Score. Trinity Industries has a valuation score of 57, which is 27 points higher than the railroad industry average of 30. It passed 4 out of 7 valuation due diligence checks.

Trinity Industries's stock has dropped -18% in the past year. It has underperformed other stocks in the railroad industry by -14 percentage points.

Greenbrier Companies (NYSE:GBX) is the second most undervalued railroad stock based on WallStreetZen's Valuation Score. Greenbrier Companies has a valuation score of 43, which is 13 points higher than the railroad industry average of 30. It passed 3 out of 7 valuation due diligence checks.

Greenbrier Companies's stock has dropped -1.4% in the past year. It has overperformed other stocks in the railroad industry by 3 percentage points.

Norfolk Southern (NYSE:NSC) is the third most undervalued railroad stock based on WallStreetZen's Valuation Score. Norfolk Southern has a valuation score of 43, which is 13 points higher than the railroad industry average of 30. It passed 3 out of 7 valuation due diligence checks.

Norfolk Southern's stock has dropped -15.11% in the past year. It has underperformed other stocks in the railroad industry by -11 percentage points.