2 Top Railroad Stocks to Consider Buying Now -- and 1 to Avoid

2 Top Railroad Stocks to Consider Buying Now -- and 1 to Avoid

Railroads, as the transporters of much of what a country imports, exports, and consumes, are cyclical stocks that tend to move up and down with the overall health of the economy. So perhaps it's no surprise that it's been a good decade for the U.S. industry, coming off recession lows, with Union Pacific (NYSE: UNP) up more than 270% since the beginning of 2008 and CSX (NASDAQ: CSX) not far behind with a 255% gain.

A 1950s-era Union Pacific E-9 locomotive and train. Image source: Union Pacific.

The other major North American railroads, a group that includes Norfolk Southern (NYSE: NSC), Kansas City Southern (NYSE: KSU), Canadian National (NYSE: CNI), and Canadian Pacific (NYSE: CP), are each up more than 150% during that time. And Berkshire Hathaway has benefited from rail as well, using growth in its wholly owned BNSF Railway Co., among other industrial assets, to offset insurance losses in the most recent quarter.

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Source: Fool.com