Dividends can be considered one of the most rewarding elements of investing in the stock market. Norfolk Southern Corporation NSC has not disappointed its shareholders on the front and has provided regular dividends since its inception in 1982.
The company has announced a 9% increase in the quarterly dividend amounting to $1.35 from the previous $1.24. The new dividend is payable on Feb 21 to its shareholders of record on Feb 3.
Norfolk Southern has an impressive history of rewarding its shareholders. In 2021, the company rewarded its shareholders to the tune of $4,418 million, through dividends ($1,028 million) and share buybacks (3,390 million).
Norfolk Southern Corporation Dividend Yield (TTM)
Norfolk Southern Corporation dividend-yield-ttm | Norfolk Southern Corporation Quote
The latest 9% hike in dividends marks the first such increase after the first quarter of 2022. In the past four quarters, NSC has paid a constant dividend of $1.24 per share.
During the first nine months of 2022, Norfolk Southern paid dividends worth $881 million, and retired and repurchased common stocks worth $2,284 million. In the first nine months of 2022, free cash flow was $2,142 million, which supports the company’s expectation to pay dividends of 35-40% in 2022.
A high dividend-yielding stock is much coveted by investors. Needless to say, they are always on the lookout for companies with a consistent and incremental dividend history. Therefore, Norfolk Southern’s decision to increase dividends certainly seems prudent.
Zacks Rank & Stocks to Consider
Currently, Norfolk Southern holds Zacks Rank #3 (Hold). Some better-ranked stocks from the broader Zacks Transportation sector are American Airlines AAL and Gol Linhas Aereas Inteligentes S.A. GOL. American Airlines and Gol Linhas currently carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
AAL has an expected earnings growth rate of more than 100% for the current year. AAL delivered a trailing four-quarter earnings surprise of 8.62%, on average. The Zacks Consensus Estimate for AAL’s current-year earnings has improved 26.1% over the past 60 days. Shares of AAL have gained 19.3% over the past six months.
Gol Linhas predicts fourth-quarter passenger unit revenues to be up 20% year over year, backed by a continued recovery in travel demand. Gol Linhas’ acquisition of domestic airline MAP Transportes Aéreos Ltd, a Brazilian domestic airline, for R$28 million is a prudent move. The acquisition is likely to boost the company's top line by attracting additional traffic. Gol Linhas has an expected earnings growth rate of 55.4% for 2023.
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Free: See Our Top Stock and 4 Runners Up >>Norfolk Southern Corporation (NSC) : Free Stock Analysis Report
Gol Linhas Aereas Inteligentes S.A. (GOL) : Free Stock Analysis Report
American Airlines Group Inc. (AAL) : Free Stock Analysis Report
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