Are railroads a good stock investment?

Railroad stocks don't tend to generate flashy returns, but the companies are the backbone of the U.S. transportation system and provide reliable cash flows and dividends. The industry is cyclical, performing better when the economy is strong.

What are the top five railroad companies?

The top five railroad companies are Union Pacific, CSX, Norfolk Southern, Canadian National, and Canadian Pacific Kansas City.

What are the railroad stocks with the highest dividends?

In early 2026, the highest dividend yields in the railroad industry were paid by Canadian National (2.4%) and Union Pacific (2.1%).

Who is the billionaire who owns the railroads?

While railroads were once owned by wealthy individuals, including Cornelius Vanderbilt, today's companies are either owned by shareholders or other publicly traded companies. Today, the billionaire most associated with railroads is Warren Buffett. Berkshire Hathaway owns Burlington Northern Santa Fe (BNSF), one of the two major U.S. West Coast railroads.

What are the most undervalued railroad stocks?

Based on the stock multiple to earnings, Norfolk Southern and CSX are the two lowest-valued railroad stocks. Canadian Pacific Kansas City is the highest valued.

Can railroad stocks provide dividends?

Yes. In fact, most major railroads around the globe are dividend payers.

Are there ETFs that focus on railroad companies?

There are no railroad-specific ETFs, probably because there is such a small number of North American railroads. But you still have options. Many top transportation ETFs have significant exposure to the rail industry.

Best Railroad Stocks for 2026 and How to Invest

A guide to the businesses that keep America rolling.

By Lou Whiteman – Updated Feb 18, 2026 at 6:26 PM EST | Fact-checked by Frank Bass

Key Points

Railroad stocks link to major economic sectors, offering steady dividends and growth potential.
Precision Scheduled Railroading reduces costs, boosting profits and shareholder returns.
Investors should examine network efficiency and market exposure before buying railroad stocks.

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Ticker Information Table
Name and ticker	Current price	Market cap
Union Pacific (NYSE:UNP)	$264.73	$157.2 billion
Canadian Pacific Kansas City (NYSE:CP)	$87.46	$78.9 billion
Canadian National Railway (NYSE:CNI)	$112.16	$68.6 billion
CSX (NASDAQ:CSX)	$42.69	$79.4 billion
Norfolk Southern (NYSE:NSC)	$314.11	$70.7 billion

Data as of Mar 2, 2026. Showing 5 of 5 tickers.

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1. Union Pacific

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NYSE: UNP

Union Pacific

Today's Change

(0.25%) $0.66

Current Price

$264.73

Key Data Points

Market Cap

$157B

Day's Range

$261.60 - $266.04

52wk Range

$204.66 - $267.88

Volume

90K

Avg Vol

3.4M

Gross Margin

45.65%

Dividend Yield

2.57%

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2. Canadian Pacific

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NYSE: CP

Canadian Pacific Kansas City

Today's Change

(0.39%) $0.34

Current Price

$87.46

Key Data Points

Market Cap

$79B

Day's Range

$87.05 - $88.96

52wk Range

$66.49 - $88.96

Volume

143K

Avg Vol

2.5M

Gross Margin

40.34%

Dividend Yield

0.72%

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Canadian Pacific (CP +0.39%) was historically the smaller of the two major Canadian railroads. That changed with the company's 2023 acquisition of Kansas City Southern. The deal gave Canadian Pacific a vast network down the spine of North America to a deep-water port in Mexico. This network, coupled with its existing east-west track across Canada, allows freight to travel around the continent seamlessly.

Railroad mergers have a long history of getting off track, and investors should tread cautiously during what is likely to be a multiyear integration process. But if all goes according to plan, the new Canadian Pacific-Kansas City Southern combination can be a new North American transportation powerhouse.

3. Canadian National

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NYSE: CNI

Canadian National Railway

Today's Change

(1.73%) $1.91

Current Price

$112.16

Key Data Points

Market Cap

$69B

Day's Range

$109.97 - $112.49

52wk Range

$90.74 - $112.49

Volume

45K

Avg Vol

1.6M

Gross Margin

44.88%

Dividend Yield

2.27%

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Canadian National (CNI +1.73%) has been public only since the mid-1990s, but the government entity-turned-private company provides access to almost every corner of Canada and a shipping link to the Gulf of Mexico. The railroad has more than 20,000 route miles of track and hauls agricultural products, energy, and containers from coast to coast.

Canadian National offers something that its U.S. counterparts can't match: Access to both the Atlantic and Pacific oceans, as well as all geography in between. The company is well-positioned to benefit from strong demand for Canadian energy assets and the impact of companies bringing their supply chains to North America.

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Train track in the sunset. — Image source: Getty Images.

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4. CSX

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NASDAQ: CSX

CSX

Today's Change

(0.42%) $0.18

Current Price

$42.69

Key Data Points

Market Cap

$79B

Day's Range

$42.07 - $42.77

52wk Range

$26.22 - $42.81

Volume

17M

Avg Vol

13M

Gross Margin

33.25%

Dividend Yield

1.55%

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CSX (CSX +0.42%) is primarily focused east of the Mississippi River, with more than 20,000 miles of track and access to 70 ports. Due to the more congested landscape, East Coast railroads have historically been less efficient than their Canadian and Western counterparts.

Still, CSX has made great strides in recent years in improving its operations. CSX has delivered compound annual growth of more than 9% over the past five years.

CSX has officially existed only since 1980, but it is a combination of a number of railroads that have been around since the dawn of the U.S. rail age, including the Baltimore & Ohio, the oldest in the nation. The company faces the challenge of maintaining and modernizing many century-old assets along the rails, but it has still generated reliable profits.

5. Norfolk Southern

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NYSE: NSC

Norfolk Southern

Today's Change

(0.35%) $1.10

Current Price

$314.11

Key Data Points

Market Cap

$71B

Day's Range

$311.06 - $315.25

52wk Range

$201.63 - $319.94

Volume

38K

Avg Vol

1.3M

Gross Margin

32.44%

Dividend Yield

1.72%

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Investing in railroad stocks FAQ

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About the Author

Lou Whiteman is a contributing Motley Fool stock analyst covering aerospace, defense, transport, manufacturing, specialty finance, and bank stocks. Previously, Lou was a financial analyst and senior writer for TheStreet, a venture capital specialist for The Deal LLC, and a high school personal finance teacher. He holds a bachelor’s degree in communications from Loyola University Maryland and completed a fellowship at the ABA Stonier Graduate School of Banking.

TMFLouWhiteman

@louwhiteman

Lou Whiteman has positions in Berkshire Hathaway. The Motley Fool has positions in and recommends Berkshire Hathaway and Canadian Pacific Kansas City. The Motley Fool recommends Canadian National Railway and Union Pacific. The Motley Fool has a disclosure policy.

One other "railroad company" is a lot more than railroading

Another railroad competes against Union Pacific out West, but it is hidden inside the massive portfolio of Berkshire Hathaway (BRK.A +0.50%)(BRK.B +0.45%). In 2009, Berkshire Hathaway bought full control of Burlington Northern Santa Fe (BNSF), giving it ownership of North America's largest railroad. BNSF operates more than 32,500 miles of track in 28 states and three Canadian provinces.

BNSF's earnings make up only a small fraction of Berkshire Hathaway's overall revenue, and it would be unwise to buy Berkshire solely for its railroad. But for investors looking for exposure to rail in a diversified package, Berkshire Hathaway could be an attractive investment.

Criteria for selecting the best railroad stocks

In an industry where growth (in terms of new rail being built) is minimal, efficiency is the key. Track who is the most efficient using the operating ratio, which is operating expenses divided by operating revenue. A lower ratio indicates a more efficient railroad.

Because these are total-return stocks, investors should also focus on free cash flow yield. Railroads spend billions annually on track maintenance, but free cash flow yield provides an indication of what is left over for shareholders.

Also, investors should consider revenue mix and economic sensitivity. Some railroads offer cyclical growth through exposure to international ports, while some are more defensive because they haul more chemicals or other products less sensitive to economic swings.

Are railroad stocks right for you?

Rail can be plodding, but it does deliver. In a world where the supply chain is under pressure and fuel efficiency is king, rail is well positioned to take a larger part of the transportation pie in the years to come.

Rail offers the ability to haul a lot more cargo than other transportation methods with just a handful of employees.

Unlike trucking, rail has a 24/7 operating model.

Rail companies are reliable dividend payers.

These railroad companies provide a steady stream of income, reliable cash flows, and modest but sustainable revenue growth. Railroad stocks can be an attractive way to diversify for investors looking to keep a growth-focused portfolio on the rails when tech stocks are out of favor.

Best Railroad Stocks to Buy in 2026 and How to Invest in Them

A guide to the businesses that keep America rolling.

Key Points

1. Union Pacific

Key Data Points

2. Canadian Pacific

Key Data Points

3. Canadian National

Key Data Points

4. CSX

Key Data Points

5. Norfolk Southern

Key Data Points

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Investing in railroad stocks FAQ

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Key Data Points

Investing in railroad stocks FAQ

Are railroads a good stock investment?

What are the top five railroad companies?

What are the railroad stocks with the highest dividends?

Who is the billionaire who owns the railroads?

What are the most undervalued railroad stocks?

Can railroad stocks provide dividends?

Are there ETFs that focus on railroad companies?

Top railroad stocks to consider

1. Union Pacific

2. Canadian Pacific

4. CSX

Related investing topics

FAQ

Key Data Points

Key Data Points

Key Data Points

Key Data Points

3. Canadian National

5. Norfolk Southern

How to invest in railroad stocks

Investment strategies for railroad stocks

One other "railroad company" is a lot more than railroading

Criteria for selecting the best railroad stocks

Are railroad stocks right for you?