Aurizon (OTCMKTS:QRNNF) vs. CSX (NASDAQ:CSX) Critical Analysis

CSX (NASDAQ:CSX) and Aurizon (OTCMKTS:QRNNF) are both industrials companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of current ratings for CSX and Aurizon, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CSX	0	6	12	0	2.67
Aurizon	0	0	0	0	N/A

CSX presently has a consensus target price of $38.61, indicating a potential upside of 16.65%. Given CSX’s higher probable upside, equities research analysts plainly believe CSX is more favorable than Aurizon.

Dividends

CSX pays an annual dividend of $0.48 per share and has a dividend yield of 1.5%. Aurizon pays an annual dividend of $0.06 per share and has a dividend yield of 2.7%. CSX pays out 26.4% of its earnings in the form of a dividend. Aurizon pays out 54.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. CSX has increased its dividend for 20 consecutive years.

Institutional & Insider Ownership

73.6% of CSX shares are owned by institutional investors. Comparatively, 13.3% of Aurizon shares are owned by institutional investors. 0.6% of CSX shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares CSX and Aurizon”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CSX	$14.68 billion	4.41	$3.72 billion	$1.82	18.19
Aurizon	N/A	N/A	N/A	$0.12	20.41

CSX has higher revenue and earnings than Aurizon. CSX is trading at a lower price-to-earnings ratio than Aurizon, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares CSX and Aurizon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CSX	24.52%	29.11%	8.48%
Aurizon	N/A	N/A	N/A

Summary

CSX beats Aurizon on 11 of the 13 factors compared between the two stocks.

About CSX

CSX Corporation, together with its subsidiaries, provides rail-based freight transportation services. The company offers rail services; and transportation of intermodal containers and trailers, as well as other transportation services, such as rail-to-truck transfers and bulk commodity operations. It also transports chemicals, agricultural and food products, minerals, automotive, forest products, fertilizers, and metals and equipment; and coal, coke, and iron ore to electricity-generating power plants, steel manufacturers, and industrial plants, as well as exports coal to deep-water port facilities. In addition, the company provides intermodal services through a network of approximately 30 terminals transporting manufactured consumer goods in containers; and drayage services, including the pickup and delivery of intermodal shipments. It serves the automotive industry with distribution centers and storage locations, as well as connects non-rail served customers through transferring products, such as plastics and ethanol from rail to trucks. The company operates approximately 20,000 route mile rail network, which serves various population centers in 26 states east of the Mississippi River, the District of Columbia, and the Canadian provinces of Ontario and Quebec, as well as owns and leases approximately 3,500 locomotives. It serves production and distribution facilities through track connections. CSX Corporation was incorporated in 1978 and is headquartered in Jacksonville, Florida.

About Aurizon

Aurizon Holdings Limited, through its subsidiaries, operates as a rail freight operator in Australia. The company operates through Network, Coal, Bulk, and Other segments. It transports various commodities, including mining, agricultural, industrial, and retail products; and retail goods and groceries across small and big towns, and cities, as well as coal and iron ore. The company also operates and manages the Central Queensland Coal Network that consists of 2,670 kilometers of track network; and provides various specialist services, such as rail design, engineering, construction, management, and maintenance, as well as supply chain solutions. It serves miners, primary producers, and the industry. The company was formerly known as QR National Limited and changed its name to Aurizon Holdings Limited in December 2012. The company was incorporated in 2010 and is headquartered in Fortitude Valley, Australia.