Canadian National Dividend Stock Analysis

CNR

Canadian National Railway Co (CNR.TO)(CNI) is the second largest publicly traded railroad company in North America. The company commands an impressive 20,000 miles of rail network and the only railroad serving three coasts. The following system map image demonstrates the scale and reach of Canadian National.

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Canadian National Railway Co System Map

Canadian National is one of the best run companies in the industry. The company continues to churn out impressive numbers year after year. Qualitatively, the CN also maintains an impressive strategic advantages such as the Chicago bypass, which other railroads have to face and deal with the delays.

Railroads are the pulse of the economy. While crude shipments are on their way to a recovery thanks to the rise in oil prices, coal remains in a secular downtrend, although coal plays a very small role and CN escapes the issues faced by other competitors in the industry. CN operates at a great margin and has demonstrated to be the best in class.

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Canadian National Railway Dividend Increase

CNR

Canadian National Railway Company (CNR.TO/CNI) announced a 20% increase in its cash dividend. The quarterly cash dividend will increase from C$0.3125 to C$0.375 per share and payable on Mar 31, 2016 to shareholders on record as of Mar 10, 2016.

Including today’s announcement, CN has declared annual increases to its dividend 20 consecutive times, averaging 17 per cent per year, since its initial public offering of shares in 1995. The annual dividend rate goes up from C$1.25 to C$1.50. Yield going forward based on today’s closing stock price is 2.10%.

Canadian National Railway Dividends & Dividend Growth Rates

Canadian National Railway Dividends & Dividend Growth Rates

From the press release statement:

Luc Jobin, CN executive vice-president and chief financial officer, said: “We are pleased to uphold our track record of consistently returning cash to shareholders. This dividend increase is testimony to our confidence in the strong cash flow generation capacity of CN throughout business cycles, and reaffirms our objective of gradually increasing the dividend payout ratio toward 35 per cent.

My portfolio consists of 52 shares of Canadian National Railway, which increases my annual dividends from C$65.00 to C$78.00, an increase of C$13.

Canadian National Railway Dividend Stock Analysis 2015

CNR

Canadian National Railway Company (CNR.TO) (CNI) is the second-largest railroad company in North America. The company operates 20,000 miles of network serving three coasts — Atlantic, Pacific, and Gulf coast. CN operates in one of the widest moat industries — railroads. The company has a diversified traffic volume including intermodal, petroleum & chemicals, grain & fertilizers, forest products, metals & minerals, automotive, and coal.

The company is a dividend challenger having raised dividends for 18 consecutive years and has a 5-yr CAGR of 15.2%. The company has the best in class operating margins beating out giants such as UNP, NSC and CSX.

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Recent Buy – Canadian National Railway

CNR

The stock market is going through some wild swings. There are plenty of reasons for the overall sentiment to be down for active traders, but that just means a great opportunity for long term investors to pick up some quality companies in the midst of the panic. Whenever I make a purchase, I like to share my buys to document and illustrate how I am building my income stream over the course of months/years. My main goal is simply to keep investing at regular intervals and build my passive income over the course of time. This is one last purchase for the month of August, adding to an existing position.

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Recent Buy – Canadian National Railway

Canadian National Railway

One last buy before November concluded. This is a transaction I wasn’t expecting to place, but the crash in oil prices following the OPEC decision to not cut oil supply to the market caused repercussions elsewhere in other industries. I initiated a new position in Canadian National Railway (CNR.TO) (CNI). Canadian National Railway is the larger of the two Canadian railroad companies and the second largest publicly traded railroad companies in North America. The company commands 20,000 miles of tracks and is strategically well placed to move oil from Alberta, the Bakken fields and to/from the refineries in the Gulf Coast. A holding of Bill Gates’ Cascade Investments, this stock has made Mr. Gates and his investment firm very rich over the years. I have initiated with a position of 20 shares in the Canadian listed stock, which adds C$20.00 to my dividend income annually going forward.

The Case for Railroads

Railroads are the pulse of the economy. Whether transporting crude, lumber, merchandise, agricultural or industrial products, railroads are what keeps the economy moving. While the transportation for entities such as coal (which used to be the largest users of railroad service a few years ago) have fallen due to the fall in crude prices and rise of green energy alternatives, the transportation need for crude has risen significantly. North America is going through an energy revolution with the rise of crude production in Alberta, the Bakken fields in North Dakota and the Eagle Shale. While pipelines are the largest competitors for crude transportation, the immediate lack of infrastructure spells good news for the railroads.

Canadian National

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