Norfolk Southern Declares Quarterly Dividend: A Steady and Reliable Income Source

As an investor, you're always on the lookout for stable and reliable income sources. One company that has consistently delivered on this front is Norfolk Southern (NSC), a major railroad operator in the United States. Recently, Norfolk Southern declared its quarterly dividend, providing investors with a steady stream of income. Let's dive into the details and explore why Norfolk Southern's dividend is an attractive option for income-focused investors.



Norfolk Southern's dividend history
Norfolk Southern has a long history of paying dividends to its shareholders. In fact, the company has paid dividends for over 30 years, with four quarterly dividends paid out in the last twelve months. The annualized dividend payout has not changed for the last year, but the stock price has gone up by 4.8% from a year ago. This means that the dividend yield has decreased by 4.6% over the past year. However, Norfolk Southern's dividend yield of 2.2% is still higher than the Industrials sector average of 1.42% and the industry average of 2.23%.

Norfolk Southern's dividend payout ratio
Another important metric to consider is the dividend payout ratio, which is the annual dividend per share divided by the earnings per share (EPS) or cash flow per share. Norfolk Southern's payout ratio is 50.6%, which is higher than the Industrials sector average of 33.1% and the industry average of 49.07%. A higher payout ratio indicates that the company is paying out a larger portion of its earnings or cash flow as dividends. While this can be a concern, it also suggests that the company is committed to returning value to its shareholders through dividends.

Norfolk Southern's dividend growth
One of the most attractive aspects of Norfolk Southern's dividend is its consistent growth over the past decade. The company has increased its dividend for 7 years in a row, with a total dividend payout of $5.40 per share in 2024. This is higher than the average dividend payout of its peers in the railroad industry, which is around $1.47 per share. Additionally, Norfolk Southern's dividend yield of 2.20% is higher than the industry average of 1.42%.

Why invest in Norfolk Southern's dividend?
There are several reasons why investing in Norfolk Southern's dividend can be an attractive option for income-focused investors:

1. Steady and reliable income: Norfolk Southern's consistent dividend payout and growth make it a reliable source of income for investors.
2. Attractive yield: With a dividend yield of 2.2%, Norfolk Southern offers an attractive income opportunity compared to other stocks in the Industrials sector.
3. Strong dividend growth: Norfolk Southern's dividend growth over the past decade demonstrates the company's commitment to returning value to shareholders through dividends.
4. Strong financial performance: Norfolk Southern's strong financial performance, including its earnings growth and cash flow generation, supports its ability to continue paying and growing its dividend.



Conclusion
Norfolk Southern's recent quarterly dividend declaration is a testament to the company's commitment to returning value to its shareholders through dividends. With a strong dividend history, attractive yield, and consistent growth, Norfolk Southern's dividend is an attractive option for income-focused investors. As an investor, it's essential to consider the company's dividend payout ratio and growth potential when evaluating its dividend as an income source. By doing so, you can make informed decisions about whether Norfolk Southern's dividend is the right fit for your portfolio.