Union Pacific Corporation (UNP), CSX Corporation (CSX), & Norfolk Southern Corp. (NSC): There Is No One Better in This Industry

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When you compare the company to its peers, and find that they are the best at many performance metrics, it’s a good bet the stock will perform well. Unless the whole industry is in decline, a company that outperforms its peers, gives an investor some comfort when the market’s waters get rough. If you are looking for the leader in the railroad industry, look no further than Union Pacific Corporation (NYSE:UNP).

Union Pacific Corporation (NYSE:UNP)A great stock and an economic report all in one
I honestly don’t understand why more investors don’t read railroad earnings. Many times I’ve gotten some of my best stock tips from these quarterly reports. Railroads transport both raw and finished goods for multiple industries. It’s a good bet if the big three railroads, Union Pacific Corporation (NYSE:UNP), CSX Corporation (NYSE:CSX), and Norfolk Southern Corp. (NYSE:NSC), all see volumes increasing, that the industry is doing well. On the flip side, you can also get a sense of industries that may run into problems.

For instance, when Union Pacific Corporation (NYSE:UNP) reported earnings, they said that chemical volumes were up 14%, and CSX Corporation (NYSE:CSX) reported an increase of 11%. Though Norfolk Southern Corp. (NYSE:NSC) has yet to report, it’s a good bet that chemical performance will be a positive in their earnings as well. CSX Corporation (NYSE:CSX) suggested that this increase in volume was due to energy-related crude demand, as well as gas and frac sand. A smart investor might use this information to investigate companies involved in these industries.

By the same token, investors had multiple notices that the coal industry was going to have a rough patch because shipment volumes have been dropping across the board. When CSX Corporation (NYSE:CSX) and Norfolk Southern Corp. (NYSE:NSC) report better than 10% declines in coal volumes and Union Pacific Corporation (NYSE:UNP) reports a 6% decrease, it’s hard to imagine a pure coal play that would do well. Even with all of this free information about the economy, investors need to like the railroad itself to put their hard earned money into the shares. The great news for Union Pacific Corporation (NYSE:UNP) investors is, their railroad is outperforming their peers in multiple ways.

4 ways better than the competition
The first reason to consider Union Pacific Corporation (NYSE:UNP) is the company has consistently weathered the coal storm better than its peers. In past quarters, CSX Corporation (NYSE:CSX) and Norfolk Southern Corp. (NYSE:NSC) have reported a 15% or 20% decline in coal volumes. By comparison, Union Pacific would report a decline of 10% or less. The same relationship held true this quarter, where CSX Corporation (NYSE:CSX) saw a decline of 10%, and Union Pacific saw a decline of 6%. When an industry is struggling, the railroad that can limit the effects of this challenge should outperform.

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