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Western Railroad Discussion > ROI vs ORDate: 12/23/18 13:55 ROI vs OR Author: StStephen https://www.spglobal.com/platts/en/market-insights/latest-news/coal/122118-four-us-railroads-deemed-revenue-adequate-stb
Union Pacific has the highest ROI, 14.08%, of any railroad, including all of the others practicing "PSR". Can someone give a good explanation of what this means relative to stockholders/investors, in terms of value of stock? Why would a lower OR with a lower ROI be more valuable than a higher OR with a higher ROI? What is the typical relationship between dividends to stockholders and ROI? How does it affect UP's corporate bonds? Is there any correlation between the ROI and long-term growth/health of a railroad, more so than the OR? It would seem to me that in very high capex industries the ROI would be a better gauge of financial performance, but I defer to those with stronger accounting backgrounds than I have (which is limited) to explain all that. TIA for responses. Bruce |