In this article, we discuss 10 Best Railroad Stocks To Buy Now.
In February, the Association of American Railroads reported that intermodal volumes remained robust, rising 6.4% year-over-year. Weekly originations hit an all-time high in February, averaging 276,654 units. This growth was fueled by steady consumer spending and some importers ordering extra shipments ahead of possible tariffs. So far in 2025, intermodal volume is up 8.5%, and container volume has jumped 9.5%, setting a new record for this period. Moving forward, intermodal growth will depend on consumer demand, which is closely tied to job market strength and potential trade policy shifts.
However, American railroads experienced a 4.5% drop in carloads, moving 843,618 units in February. In the last five months, January had the first increase in carloads, but harsh winter weather, including flooding in the Northeast and freezing temperatures across most of the country, interrupted operations and obstructed freight handling. Without these weather challenges, rail volumes likely would have been higher. Coal being the largest commodity moved by rail continued its downward trend, with carloads dropping 8.2% in February and marking the 14th consecutive month of declines.
As the US ramps up its trade war under President Trump, freight railroads are preparing for the fallout. New tariffs on Mexico, Canada, China, and the EU are set to take effect soon, potentially disrupting a massive trade network. In 2024, American railroads handled $203.1 billion in cross-border trade with Canada and Mexico, being almost evenly split between the two, as reported by CNBC. The rail industry is a huge economic driver, generating $233.4 billion in output and supporting around 750,000 jobs in 2023. Texas is a major hub for freight rail employment since it handles most of the US to Mexico rail traffic. Railroads also reinvested $26.8 billion in infrastructure last year, mostly through private funding. As trade tensions rise, the industry remains focused on keeping goods moving and ensuring rail infrastructure stays strong. Let’s take a look at the best railroad stocks to invest in with the current economic backdrop.
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Our Methodology
For this article, we focused on making a list of all railroad and railcar stocks that are publicly listed in the United States. Using Insider Monkey’s Q4 2024 hedge fund database, we examined the hedge fund sentiment for each stock and selected 10 most popular ones. The stocks are ranked in ascending order based on the number of hedge fund holders as of Q4 2024.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. L.B. Foster Company (NASDAQ:FSTR)
Number of Hedge Fund Holders: 7
L.B. Foster Company (NASDAQ:FSTR) is a Pennsylvania-based provider of engineered products and services for building and infrastructure projects globally. It operates in two segments – Rail, Technologies, and Services- offering rail products and monitoring systems, Infrastructure Solutions, manufacturing precast concrete products, and providing steel bridge products and corrosion protection solutions.
L.B. Foster Company (NASDAQ:FSTR)’s fourth quarter revenue climbed 14.2% to $79.2 million, driven by strong sales in rail products, friction management, and track monitoring. Rail margins improved to 22.2%, supported by higher volumes and a recovering UK market. However, rail orders fell 8.5%, and backlog declined 26%, largely due to a strategic pullback in rail products and UK investments. On the bright side, the global friction management backlog surged 53.4%, offsetting some of the decrease. Moreover, strong cash flow allowed debt reduction for FSTR and stronger financial leverage. The Union Pacific settlement will also add $8 million per year in cash flow for the company. On March 3, 2025, L.B. Foster Company (NASDAQ:FSTR) announced a new $40 million share repurchase program that will run until February 2028.
Insider Monkey’s Q4 2024 database found L.B. Foster Company (NASDAQ:FSTR) stock in 7 hedge fund portfolios, the same as the prior quarter. Mario Gabelli’s GAMCO Investors is the leading stakeholder of the company, with 934,200 shares worth over $25 million.
9. GATX Corporation (NYSE:GATX)
Number of Hedge Fund Holders: 14
Ranking 9th on our list of the best railroad stocks is GATX Corporation (NYSE:GATX), a railcar leasing company with operations in the United States, Canada, Mexico, Europe, and India. The company leases tank and freight railcars, locomotives, and aircraft spare engines, serving industries like petroleum, chemicals, food, and transportation. On January 31, the company declared a quarterly dividend of $0.61 per share, which will be distributed on March 31, to shareholders on record as of February 28. This marks a 5.2% increase from the previous year and extends GATX’s uninterrupted history of dividend payments dating back to 1919.
GATX Corporation (NYSE:GATX) reported a Q4 2024 net income of $76.5 million, up from $66.0 million in the same quarter last year. Full-year net income reached $284.2 million, or $7.78 per share, an increase from $259.2 million or $7.12 per share in the previous year. GATX Rail Europe grew its fleet beyond 30,000 wagons, while GATX Rail India surpassed 10,000, with high fleet utilization and rising lease renewal rates. For 2025, the company anticipates steady railcar leasing in North America, increased lease revenue, and growing international railcar demand. GATX projects earnings of $8.30 – $8.70 per share for 2025, driven by strategic investments.
If we look at Insider Monkey’s database of hedge funds as of the end of Q4 2024, GATX Corporation (NYSE:GATX) was found in the portfolios of 14 funds, compared to 16 in the prior quarter.
8. Trinity Industries, Inc. (NYSE:TRN)
Number of Hedge Fund Holders: 20
Trinity Industries, Inc. (NYSE:TRN) offers rail transportation products and services in North America. It has two main divisions, one for leasing and managing railcars and another for manufacturing and servicing them. On December 5, 2024, the company raised its quarterly dividend to $0.30 per share, up from $0.28 in the last quarter. This marks the company’s 243rd consecutive dividend payment. The cash dividend was distributed on January 31, 2025, to shareholders on record as of January 15. TRN is one of the best railroad stocks to watch out for.
Trinity Industries, Inc. (NYSE:TRN) had strong financials in 2024, with adjusted EPS rising 32% to $1.82, driven by higher lease rates, improved margins, and increased external repairs. The Railcar Leasing and Services Group ended the year with a 10% revenue increase, repricing over half its fleet at higher rates while maintaining strong utilization. In 2025, Trinity anticipates approximately 35,000 railcar deliveries, $300-$400 million in net fleet investment, $45-$55 million in capital expenditures, and EPS between $1.50 and $1.80.
Among the hedge funds tracked by Insider Monkey, 20 funds were bullish on Trinity Industries, Inc. (NYSE:TRN) in Q4 2024, compared to 22 funds in the prior quarter. Encompass Capital Advisors was the leading stakeholder of the company, with nearly 2 million shares worth $70 million.
7. The Greenbrier Companies, Inc. (NYSE:GBX)
Number of Hedge Fund Holders: 27
The Greenbrier Companies, Inc. (NYSE:GBX) specializes in designing, manufacturing, and marketing railroad freight car equipment across North America, Europe, and South America. The company manufactures a variety of railcars, including covered hoppers, gondolas, boxcars, tank cars, and intermodal railcars. Additionally, it provides wheel and axle reconditioning, railcar repairs, and parts manufacturing, as well as leasing solutions and fleet management for railroads, shippers, and transportation companies. GBX is one of the best railroad stocks to buy.
The Greenbrier Companies, Inc. (NYSE:GBX) had a solid first fiscal quarter of 2025, ending November 30, 2024, with $55 million in net earnings on $876 million in revenue. The company maintained its lease fleet utilization near 99% while adding 1,200 units, bringing the total to 16,700. It secured new orders for 3,800 railcars worth $520 million and delivered 6,000 units, growing its backlog to 23,400 railcars valued at $3 billion. The board also paid its 43rd consecutive quarterly dividend of $0.30 per share on February 19, and extended its $100 million share repurchase program through January 2027.
Among the hedge funds tracked by Insider Monkey, The Greenbrier Companies, Inc. (NYSE:GBX) was owned by 27 funds at the end of Q4 2024, up from 23 in the prior quarter. Ken Fisher’s Fisher Asset Management was a prominent stakeholder of the company, with 466,053 shares worth $28.4 million.
6. Canadian National Railway Company (NYSE:CNI)
Number of Hedge Fund Holders: 56
Canadian National Railway Company (NYSE:CNI) is a major player in the transportation and logistics industry, operating across Canada and the United States. Its services include rail transportation, intermodal solutions, trucking, and marine transport. CNI and Iowa Northern Railway officially merged operations on March 1, 2025, after getting the green light from US regulators. This merger is meant to improve service, open up new market opportunities, and boost the local economy.
In the fourth quarter of 2024, Canadian National Railway Company (NYSE:CNI)’s revenue ton miles dropped 3% year-over-year to 59,305 million. Revenues fell by C$113 million year-over-year to C$4,358 million in Q4, while operating income dropped by C$190 million to C$1,628 million. However, by December 2024, the company had repurchased over 13 million shares for more than $2.3 billion. CNI also declared a 5% dividend increase for 2025, continuing a 29-year streak of growth, and authorized another buyback program for up to 20 million shares from February 2025 to February 2026.
According to Insider Monkey’s Q4 data, Canadian National Railway Company (NYSE:CNI) was part of 56 hedge fund portfolios, compared to 44 in the last quarter. Bill & Melinda Gates Foundation Trust was the largest investor in the company, with a position worth over $5.5 billion.
5. Norfolk Southern Corporation (NYSE:NSC)
Number of Hedge Fund Holders: 63
Norfolk Southern Corporation (NYSE:NSC) is an American rail transportation company that hauls agricultural products like corn and wheat, chemicals, metals, construction materials, cars, and coal. The company finished $1 billion worth of infrastructure upgrades across its 22-state network in 2024. The projects were completed on time and within budget, boosting safety, speed, and reliability. It is one of the best railroad stocks to invest in. On March 7, 2025, Deutsche Bank started coverage of NSC with a Buy rating and price target of $293.
Norfolk Southern Corporation (NYSE:NSC) raked in $3 billion in revenue for Q4 2024, with $1.1 billion in operating income and earnings per share of $3.23. For the full year 2024, revenue stood at $12.1 billion, with $4.1 billion in operating income and an EPS of $11.57. On January 28, Norfolk announced a quarterly dividend of $1.35 per share. The dividend was paid on February 20, to shareholders on record as of February 7. The company has consistently paid dividends for 170 straight quarters since its establishment in 1982.
Among the hedge funds tracked by Insider Monkey in Q4 2024, 63 funds reported owning stakes in Norfolk Southern Corporation (NYSE:NSC), compared to 47 funds in the last quarter. Ancora Advisors was the biggest stakeholder of the company, with 1 million shares worth $236.5 million.
4. CSX Corporation (NASDAQ:CSX)
Number of Hedge Fund Holders: 63
CSX Corporation (NASDAQ:CSX) is a major freight transportation company serving the United States and Canada, specializing in rail and trucking. Deutsche Bank initiated coverage of CSX on March 7 with a Hold rating and a price target of $34. On February 12, the company announced that it is boosting its quarterly dividend by 8%, increasing it from $0.12 to $0.13 per share. The dividend will be paid on March 14, to shareholders on record as of February 28, 2025. It ranks 4th on our list of the best railroad stocks.
CSX Corporation (NASDAQ:CSX) reported a decline in Q4 2024 earnings, with operating income dropping to $1.11 billion from $1.32 billion last year. Revenue also slipped 4% to $3.54 billion, mainly due to lower fuel surcharge revenue and a drop in coal shipments, which outweighed gains from higher merchandise pricing and intermodal volume growth. However, total volume increased by 1% to 1.58 million units.
Among the hedge funds tracked by Insider Monkey, 63 funds reported owning stakes in CSX Corporation (NASDAQ:CSX) at the end of Q4 2024, up from 51 funds in the last quarter. Ken Fisher’s Fisher Asset Management was the leading position holder in the company, with roughly 25 million shares worth $805.3 million.
3. Westinghouse Air Brake Technologies Corporation (NYSE:WAB)
Number of Hedge Fund Holders: 72
Ranking 3rd on our list of the best railroad stocks is Westinghouse Air Brake Technologies Corporation (NYSE:WAB). WAB is an industry leader in rail technology, providing diesel-electric and LNG-powered locomotives, braking systems, train control tech, and railway electronics. On February 13, Susquehanna maintained a Positive rating on WAB and trimmed the price target from $222 to $218. Despite concerns over slowing revenue growth and a cost-focused five-year plan, Susquehanna sees an opportunity for the company to exceed expectations by 2026.
In Q4 2024, Westinghouse Air Brake Technologies Corporation (NYSE:WAB) reported GAAP earnings of $1.23 per share and adjusted EPS of $1.68, up 2.5% and 9.1% from the prior-year quarter, respectively. Sales for the quarter were $2.58 billion, and cash flow came in at $723 million. The company returned $1.2 billion to shareholders in 2024 and raised its dividend by 25%, while also expanding its share buyback program by $1 billion.
According to Insider Monkey’s fourth quarter database, 72 hedge funds were bullish on Westinghouse Air Brake Technologies Corporation (NYSE:WAB), compared to 54 funds in the earlier quarter. Select Equity Group held the biggest stake in the company, with over 5 million shares worth $974.2 million.
2. Canadian Pacific Kansas City Limited (NYSE:CP)
Number of Hedge Fund Holders: 74
Canadian Pacific Kansas City Limited (NYSE:CP) operates a transcontinental freight railway across Canada, the United States, and Mexico, transporting grains, coal, chemicals, automotive goods, and retail shipments. On February 27, the company announced that the Toronto Stock Exchange has authorized its plan to repurchase up to 37.35 million shares, which makes up around 4% of the company’s outstanding stock. The share repurchase program will be effective from March 3, 2025, to March 2, 2026.
In Q4, Canadian Pacific Kansas City Limited (NYSE:CP) experienced a 3% year-over-year revenue increase to $3.9 billion, with volumes up 2% and core EPS climbing 9% to $1.29. For the full year, the company generated $5.3 billion in operating cash flow and focused on paying down debt with its free cash flow after dividends. On January 29, 2025, it declared a quarterly dividend of $0.19 per share. The dividend will be distributed on April 28, 2025, to shareholders on record as of March 28.
According to Insider Monkey’s fourth quarter database, 74 hedge funds were bullish on Canadian Pacific Kansas City Limited (NYSE:CP), compared to 52 funds in the preceding quarter. Chris Hohn’s TCI Fund Management was the biggest stakeholder of the company, with nearly 55 million shares worth $4 billion.
1. Union Pacific Corporation (NYSE:UNP)
Number of Hedge Fund Holders: 93
Union Pacific Corporation (NYSE:UNP) is a Nebraska-based provider of freight transportation services across the United States. The company transports agricultural products, coal, renewable fuels, construction materials, chemicals, metals, and automotive goods. On February 6, 2025, the company declared a quarterly dividend of $1.34 per share, set to be paid on March 31, to shareholders on record as of February 28. The company has been paying dividends for 126 years straight.
In the fourth quarter of 2024, Union Pacific Corporation (NYSE:UNP) posted a net income of $1.8 billion, up from $1.7 billion a year ago. Revenue came in at $6.1 billion, down 1%, mainly due to lower fuel surcharge revenue and a weaker business mix, though higher volume and core pricing gains helped offset some of the drop. On the bright side, revenue carloads were up 5%, and the operating ratio improved by 220 basis points to 58.7%. Overall, operating income rose 5% to $2.5 billion. UNP ranks 1st on our list of the best railroad stocks to buy.
According to Insider Monkey’s fourth quarter database, 93 hedge funds were long Union Pacific Corporation (NYSE:UNP), compared to 78 funds in the prior quarter. Arrowstreet Capital was a prominent stakeholder of the company, with a position worth $558 million.
Overall, Union Pacific Corporation (NYSE:UNP) ranks first on our list of the best railroad stocks to buy. While we acknowledge the potential of UNP to grow, our conviction lies in the belief that certain AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than UNP but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.
