As freight rates are expected to rise, companies offering services in this space should witness sales growth. CSX Corporation (NASDAQ:CSX) and Canadian National Railway (TSX:CNR) (CNI) should benefit from the high demand for freight transportation. But which of these two stocks is a better buy now? Read more to find out.CSX Corporation (CSX) provides rail-based freight transportation services. The company offers rail services, transportation of intermodal containers and trailers, and other transportation services, such as rail-to-truck transfers and bulk commodity operations. On the other hand, Canadian National Railway Company (CNI) engages in the rail and related transportation business. The company operates a network of 19,500 route miles of track spanning Canada and the United States.
The railroad industry was severely hit amid the COVID-19 pandemic as their operation came to a halt owing to restrictive containment measures. Even though several parts of the world are still witnessing the resurgence of infections, railroad companies are rebounding due to accelerating shipping overland demand and rising freight rates. According to a Technavio report, the railroad market is expected to grow at a CAGR of 10.1% by 2025. Therefore, both CSX and CNI should benefit.
CSX has gained 5.8% over the past three months, while CNI has returned 3.5%. However, CNI’s 18.4% gains over the past year are significantly higher than CSX’s 14% returns. Moreover, CNI is the clear winner with 12.6% gains versus CSX’s 3% returns in terms of the past six months’ performance.