Canadian National Railway Dividend Stock Analysis

[Roadmap2Retire]

Sorry for the shameless plug.

I just finished writing my first complete Dividend Stock Analysis of a company. I picked Canadian National as its one of the companies that I am quite interested in for a long term holding. Please let me know if you feel something is missing from article that ought to be covered or something that is unnecessary. Your feedback will help me write better tailored dividend stock analysis articles in the future.

Canadian National Railway Dividend Stock Analysis

Advance disclosure: I get paid for all pageviews on the link above.

[rapidacid]

Good article R2R. I read it this morning without looking at the author and agreed on most points.

Would be nice to see CNI crank out a doozy (50%) of a dividend bump as they could afford it but that's probably wishful thinking.

I've got current P/E at 22.9 and the previous 9 year avg P/E at 14.6 so it certainly seems expensive now. Nice run since 2004 as price is +450%

I have a 3/4 non core position in CNI but I tend to label myself a UNP man as I'm overweight there. Tough to add to either with such low yields.

I followed you on SA and I look forward to your future articles.

Edit: "Freight" is misspelled here: Transportation by rail is one of the most energy-efficient ways of moving goods. A ton of frieght can be moved 400-500 miles on a single gallon of diesel.

[Roadmap2Retire]

Thanks for catching the typo...and the feedback in general. I appreciate it.

Railroads are something that have slipped through my fingers in the past. A couple of years ago, I had a look and read that majority of the transportation is coal - and seeing that coal usage was declining, I decided to step away and completely missed the (train?) boat on railroads. I am having another fresh look at them now and think that I understand the industry better.

Good pick on UNP as well. I am torn between UNP and NSC for a US-based railroad. Would love to hear everyone's thoughts on advantages/disadvantages of picking one against the other.

[rapidacid]

I'd go UNP all day for multiple reasons, with really the only knock would be the P/E comparison

ROIC, which I value very highly:
UNP: 14.6%
NSC: 9%

Chowder #:
UNP: 29.1%
NSC: 12.7%

Payout Ratio:
UNP: 33%
NSC: 34.1%

P/E:
UNP: 20.8
NSC: 17.6

---

I ran the 3 head to head in my quant screener and they came out 1) UNP 2) NSC 3) CNI with scores of 68.9, 65 and 63.55 respectively

[EricL]

Nice article, I agree with the bullish thoughts on the rails.

I own UNP and NSC and think CSX would be a fine option as well. I chose UNP because of its dominant position the Southwest and trade with Mexico. Think the ongoing boom in oil & gas will continue to drive volumes and pricing power. Chose NSC due to valuation at the time and thought they would see increasing volume due to oil transport to the east coast.

Currently up 45% on NSC and 53% on UNP since purchase last March.

Rail stocks in general are a bit pricey right now but I'm bullish long term on the sector.

[rapidacid]

Quote:Norfolk Southern (NYSE:NSC) +3.5% premarket after Bill Ackman said Canadian Pacific Railway (NYSE:CP) might be interested in a rival to one-time target CSX Corp.
While Ackman did not name NSC in his comments yesterday, he appeared to have the company in mind by describing his takeover candidate in relation to CSX, as the two carriers go head-to-head in the U.S. east of the Mississippi River.
“I think something happens,” Ackman said, noting that CP CEO Hunter Harrison believes "pro-competitive" railroad mergers will be permitted by regulators.

[Roadmap2Retire]

I decided to add to my position in CNR today. Earnings release is tomorrow after close. Also expecting a dividend increase announcement.

[Main Street Stock Investor]

R2R,

Good article on CNI. It made me review my holding in this industry. My portfolio is concentrated with dividend achievers and dividend aristocrats and I'm long NSC. NSC is a dividend achiever and my pick for a long term hold in this industry (currently a minor holding). I do not believe the other railroads have that record, but not sure. Dividend yield is higher for NSC and P/E ratio is lower than CNI or UNP. Most current research reports are indicating a Hold on railroads. I'm still in the process of building a position in NSC and based on your article and these comments, I will monitor CNI and UNP as well.

thanks

[Roadmap2Retire]

NSC is a great company, MSSI. I am debating between NSC and UNP for my second railroad.

R2R