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CSX (CSX - Get Report) is doing a good job of reminding investors that the railroad is still relevant in 2012. The firm boasts 21,000 miles of track spread across the eastern U.S., shipping coal, chemicals and intermodal containers across its network.
Efficiency has been the name of the game at CSX for the past few years. The firm has boosted net profit margins by trimming its biggest costs and working to keep its trains moving on time.
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In the world of triple-digit crude oil prices, trains make a lot of sense for freight shippers. While trucking (the biggest alternative to rail freight) is generally a more simple solution for a distribution chain, it's also more expensive -- generally four times more expensive than train shipping per ton. That's a material difference as fuel costs cause shipping costs to swell. CSX also has a big advantage in its location. The firm's tracks are focused on the eastern U.S., where the majority of the population is located; that means that products going to the big cities on the eastern seaboard need to use CSX's track.
While the railroad industry is pretty highly leveraged, CXS's debt load is better than most. That's helped the firm to continually increase its dividend payout for investors. Right now, the firm pays a 2.72% yield. CXS's next dividend gets paid out on Dec. 14.