Keep Your Dividends on Track with Rail Freight

In Warren Buffett's most recent letter to Berkshire Hathaway's (NYSE: BRK-B) stockholders he writes glowingly of his company's latest acquisition: the Burlington Northern Santa Fe railroad. Buffett touts rail's inherent advantage over its main competitor, trucking. Namely, freight transported by rail is three times more fuel efficient than by truck. With the cost of fuel becoming a major expense in almost every facet of business these days, it is worth taking a look at rail freight in a new light, not as a last century anachronism, but as an industry reborn. The ability to move one ton of freight almost 500 miles while using just one gallon of fuel means more than fuel-cost savings. The more freight that is moved by train (and the less by truck) means reduced dependence on foreign oil, lower greenhouse gas emissions, less traffic gridlock, and lower highway construction and maintenance costs. The major haulers Today's heavy lifters in rail freight include CSX (NYSE: CSX) , Canadian National (NYSE: CNI) , Union Pacific (NYSE: UNP) , Norfolk Southern (NYSE: NSC) , and Kansas City Southern (NYSE: KSU) . These five railroads operate on more than half of the almost 140,000 miles of rail roadway in the U.S. (Most of Canadian National's track is in Canada.) Here's how they compare:... Read more