CSX Corporation (CSX) shares look attractive at these levels. The stock is trading at 15.0x 2010 consensus estimates and 12.7x 2011 consensus estimates. And management expects to deliver strong double-digit EPS growth in 2010.

Analysts estimate that this Zacks #2 Rank stock will grow its earnings per share 22.9% in 2010, 18.5% in 2011, and 10.4% over the long term.

Additionally, the stock offers investors a dividend yield of 1.8%.

Business

CSX Corporation provides rail-based transportation services in North America. These services include traditional rail service, and the transport of intermodal containers and trailers.

The company is leveraged to the U.S. economy. As the industrial economy gains momentum, CSX Corp is experiencing higher sales and earnings growth.

First-Quarter Results

Revenue rose 11% to almost $2.5 billion. The company indicated that it benefited from increasing demand and the economic recovery. CSX Corp.0 increased its operating income 21% thanks to its operating margin expanding to 25.5% from 23.2% in the first quarter of 2009.

CSX earned $0.78 per share, beating the Zacks Consensus by 9 cents, or 13.0%. In the last five quarters, CSX Corp. has beaten the Zacks Consensus Estimate by an average of 9.5%.

Estimates

The Zacks Consensus for 2010 is up 4 cents in the last month and 30 cents after reporting strong first-quarter results. The 2011 Zacks Consensus is up 3 cents in the last month and 29 cents since its Q1 report.

Balance Sheet

CSX Corp. ended the first quarter with about $1 billion in cash and equivalents and debt-to-equity ratio of 0.8. Given the large capital requirements of the business, CSX Corp.’s balance looks solid.

Zacks Investment Research

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