Skip to Content
Morningstar
Get 14 Days Free

Kansas City Southern KSU

Morningstar Rating
Rating as of

Morningstar’s Analysis

Valuation
Currency in USD
Is it the right time to buy or sell?
Find out with Morningstar Premium
Is it the right time to buy or sell?
Find out with Morningstar Premium

1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Kansas City Southern's Q4 Carloads Continue Recovery; Margin Outlook Impressive, but Valuation Lofty

Matthew Young, CFA Equity Analyst

Analyst Note

| Matthew Young, CFA |

Wide-moat railroad Kansas City Southern posted 5% lower fourth-quarter revenue year over year, in line with our expectations. Carload declines once again moderated, falling 2.7% (down 6% for all of 2020), while revenue per carload fell 1% on sharply lower fuel surcharges and unfavorable foreign exchange, which more than offset higher core pricing. Carloads would've risen 2.5% if not for protest-related disruption in Mexico.

Read Full Analysis

Company Profile

Business Description

Kansas City Southern, the smallest Class I railroad, derives about half of its $2.7 billion revenue on 3,400 miles of track in the Central and Southern United States. Remaining sales are produced by operating concessions on 3,300 miles of rail in Mexico and 47 miles of track adjacent to the Panama Canal. KCS' freight includes industrial and forest products (21% of total revenue), chemicals and petroleum (26%), agriculture and minerals (18%), intermodal (13%), energy (9%), and autos (9%); other revenue stems from switching, demurrage, and the like.

Contact
427 West 12th Street
Kansas City, MO, 64105
T +1 816 983-1303
Sector Industrials
Industry Railroads
Most Recent Earnings Sep 30, 2020
Fiscal Year End Dec 31, 2020
Stock Type Cyclical
Employees 7,040

Related

Our Picks
5 Cheap Stocks With Growing Dividends
We turn to the Morningstar US Dividend Growth Index for stock ideas.
Susan Dziubinski
Investing Specialists
Morningstar Runs the Numbers
We take a numerical look through this week's Morningstar research. Plus, our most popular articles and videos for the week ended Nov. 11.
Morningstar.com
Stock Strategist Industry Reports
What Trump's Election Means for Industrials
Defense is likely to be the clearest beneficiary, with a mixed impact for other sectors.
Keith Schoonmaker
Investing Specialists
New Stocks in the Morningstar Wide Moat Focus Index
We've added to the roster of attractively priced, competitively advantaged companies.
Karen Wallace
Stock Strategist Industry Reports
Lower Volume Hits Rail Valuations
Our wide moat ratings are intact for all six railroads, however.
Keith Schoonmaker
Quarter-End Insights
Stock Market Outlook: Late-Cycle Behavior?
We're unenthusiastic about the valuation of the broader market, but opportunities can be found in a few out-of-favor sectors.
Matthew Coffina
Stock Strategist Industry Reports
Railroads: The Ties That Bind
Despite low fuel prices pointing toward the contrary, railroads' competitive advantages remain strong against transportation rivals.
Rob Wherry
ETF Specialist
Just a Bump in the Road for the Global Infrastructure Sector?
This ETF has been battered by the decline in energy prices and weakness in emerging markets.
Robert Goldsborough
ETF Specialist
Can the Hard-Hit Transportation Sector Get Back on Track?
Interested investors may consider this ETF, the largest that holds U.S. transportation companies, which have been battered by sagging commodity prices.
Robert Goldsborough
Stock Strategist Industry Reports
Railroads' Competitive Advantages Are Solid, but Challenges Lie Ahead
Containers, coal, crude, and codes are investors' current concerns.
Keith Schoonmaker
ETF Specialist
Opportunity in the World’s Roads, Railways, and Water Systems
iShares Global Infrastructure provides a broad, inexpensive way to invest in global infrastructure.
Robert Goldsborough
Credit Insights
Corporate Bonds Largely Unchanged Following Fed Statement
New Best Idea highlighted, but otherwise, value hard to find.
David Sekera
Stock Strategist
What Makes a Moat?
In an excerpt from their new book, Morningstar's Heather Brilliant and Elizabeth Collins explore how to identify a moat and how intangible assets can help a firm carve out a sustainable competitive advantage.
Heather Brilliant
Quarter-End Insights
Industrials Stocks: Automakers Look Undervalued
We are concerned about a slow start to U.S. light-vehicle sales this year, but we expect improvement once the cold abates.
David Whiston
US Videos
Morningstar Minute: Rails Are Just the Ticket for Wide Moats
Class I railroads have cost advantages and scale efficiencies that give them a competitive edge over lesser players.
Keith Schoonmaker
US Videos
2 Wide-Moat Railroads for Your Radar
Morningstar's Matt Coffina and Keith Schoonmaker discuss why companies in this sector have wide moats and which are the best railroads for long-term investors.
Matthew Coffina
Stock Strategist Industry Reports
Economic Moat Crossing Ahead: Railroads Advance to Wide
Railroads bolstered our confidence in the persistence of excess returns via solid performance through the recent recession and coal weakness.
Keith Schoonmaker
Quarter-End Insights
Our Outlook for the Credit Markets
Widening investment-grade credit spreads and rising interest rates lead to losses.
David Sekera
Credit Insights
The Demand for Everything Is Just Nuts
The longer that interest rates and credit spreads continue to generate historically low all-in yields, the more asset managers will stray from their traditional investment allocations.
David Sekera
Quarter-End Insights
Credit Outlook: Sector Updates and Top Bond Picks
Get our sector-by-sector take on the bond market, plus our five best bond ideas.
David Sekera