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This past May might go down as one of the strangest months in our nation’s history. It began with the announcement from President Barack Obama that Osama bin Laden had been killed. The market followed with a huge downward trend with large swings daily. Meanwhile, hopeful Republican presidential candidates started dropping their names from consideration as the president rode a wave of success. Then came weather conditions the likes of which have never been seen. Tornado season kicked off with a bang in Joplin, Missouri, causing historical amounts of damage, including over a hundred deaths. Not even two weeks later tornadoes devastated parts of Massachusetts, something which it surely wasn't prepared for.

Again, the market has not responded well to any of this news. It is by no surprise that insurance companies like AIG have taken a hit, but many defensive stocks or less popular industries have held steady or even grown. Unfortunately, with tragedy there is often opportunity. The homes and businesses in Joplin and in Massachusetts will need to be rebuilt and this could create work for home builders, my personal favorite being Hovnanian Enterprises (NYSE:HOV), but only because I am from New Jersey. These companies will need lumber from companies like Weyerhaeuser (NYSE:WY) which offers an attractive dividend.

Most importantly, all of the raw materials will need to be shipped and that is where companies like Norfolk Suffolk (NYSE:NSC), CSX Corp (NYSE:CSX), Union Pacific (NYSE:UNP) and Canadian National (NYSE:CNI) come into play. These companies make up the railroad aspect of transnational shipping and will be instrumental in the rebuilding process. I do not want to overvalue the potential revenue from these disasters, but like most industries, rails took a thrashing during the recession and are still offering recovery growth. Going forward we will review these four companies from a financial standpoint, but for more on rail growth click here.

First up is Norfolk Suffolk, which covers the eastern portion of the U.S. Its lines go as far as Kansas City, Missouri, which is actually fitting for Joplin, and go as far north as Maine, and it has one line going as far south as Miami (and one stretching to Dallas). The company hits all of the major ports and cities along this stretch, with a big focus in Virginia and New Jersey (since Trenton Makes and The World Takes).

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The stock is currently priced at $71 with a PE of 16.94. It is the smallest of the four with a market cap of $25.3B, but it offers the best dividend of the group at 2.2%. This dividend pays out next week and should rise next quarter since the company has a history of rising biannually, with the exception of a freeze in 2009.

CSX covers the same territory as Norfolk with a few more connections in Florida. I do ride on commuter trains pretty frequently and see more CSX cars than any in freight yards, but I would not give any merit to this.

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As a stock it has had success equal to the industry over the last year. It is priced at $77 with a PE of 17.77. This is the highest of the four, but it is by no means a significant amount higher. The company is also fairly small with a market cap of $28.4B and has a dividend that was just raised by 38% bringing it to roughly 1.9% per share.

Conversely, Union Pacific covers the entire western side of the country. This goes from New Orleans to Seattle and covers all of Texas, which of course, is big. There is some overlap with CSX and Norfolk in that they all cover tornado alley.

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Union Pacific is the largest with a market cap of $50.1B. It is a bit pricier at $102, but most investors should know that this means little. The PE is 17.57 and the yield 1.8%.

Canadian National covers the greatest distance north to west and is the only company of the four to cross both borders. In the U.S. it also covers tornado alley all the way down to southeast Texas. As its name would suggest, the company traverses all of Canada and even has an ocean line to Alaska. It goes as far south as Mexico City, while covering the majority of that country.

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The company currently has the lowest PE, at 15.24, and has a mid-sized market cap of $34.7B. They are currently yielding 1.7%.

All of these companies have shown impressive growth over the last year, which is mainly a product of their recessionary lows. They all offer very stable, albeit low paying, dividends that have a history of rising annually. But in these times, stability is an asset; couple that with the expected rise in railroad traffic and all of these companies could be winners despite their current highs.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Source: 4 Railroad Shippers as Defensive Plays With Major Upside in Turbulent Times