Wednesday, November 14, 2012

Norfolk Southern, NSC Dividend Machine for week of 11/12/2012

Norfolk Southern Engine along KCS rail.
Norfolk Southern Engine along KCS rail. (Photo credit: Wikipedia)

Norfolk Southern, NSC is my Dividend Machine for this week  November 12, 2012


            In every crisis, an opportunity can be found.  The transports were killed today and today I looked for dividend machines and would you not know it, Norfolk Southern was the first company I found to qualify as a dividend machine.


            I have owned NSC over and over again.  NSC’s stock price is volatile which provides opportunities for covered call income.  I lost NSC a long time ago to a covered call and I have been waiting to get it back.  


            Look at this company from the dividend machine viewpoint and it qualifies on every level.   NSC earned $ 5.53 during the past four quarters.   Were you worried about business during the past four quarters?   In spite of the trouble with US fiscal matters, NSC has earned a lot of money. However, we income investors care only about how much money we received.  NSC paid out $ 1.94 per share during the last four quarters.  This is a good ratio.   NSC’s currently quarterly dividend is $.50 at the closing price of $57.51 the annualized dividend yield is 3.42%.  It has paid dividends since 1902 and has increased the dividend every year for the last 10 years.  Moreover, NSC does all this business on just a 1% D/E ratio.


            The table below presents NSC’s dividend machine values.


Norfolk Southern
Price when profiled
Last 4 Qtrs Earnings
Last 4 Qtrs Dividends
Current Qtr Dividend
Annualized Div Yield
No. Years Div Increase
Debt/Equity ratio


              Discipline is very important when you invest your money.   Sticking with your disciplined approach is difficult when the market is nasty, but I think over time a disciplined approach is best.  Disciplined income investors might find Norfolk Southern, NSC, a good fit.


Very Truly Yours,

Enhanced by Zemanta