Canadian National Railway

Canadian National Railway Company engages in rail and related transportation business in North America. It offers transportation services that include rail, intermodal container, and trucking services; and supply chain solutions, including warehousing and distribution, cargoflo, logistics parks, freight forwarding, customs brokerage service, industrial development, and marine services. The company transports various goods, such as automotive, coal, fertilizers, food and beverages, forest products, dimensional and heavy loads, shipping grains, metal and minerals, petroleum and chemicals, specialty crops, and intermodal products. It operates a network of approximately 20,000 route miles of track spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico. It serves the ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama); and the metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth (Minnesota)/Superior (Wisconsin), Green Bay (Wisconsin), Minneapolis/St. Paul, Memphis, and Jackson (Mississippi), with connections to all points in North America. Canadian National Railway Company was founded in 1922 and is headquartered in Montreal, Canada. (Summary) (Company) (Daily Chart)

The Canadian National Railway Company ("CN") is a Canadian based railway headquartered in Montreal, Quebec. The railway serves both Canada and the Midwestern and Southern portions of the US. CN employs 22,000 people throughout it's system and has a market capitalization of over 32 billion Canadian. CN was originally a government-owned Canadian Crown Corporation until it through the process of privatization in 1995. CN today is the largest railway in Canada in terms of both revenue and the sheer physical size of its rail network. It is also Canada's only transcontinental railway spanning the country from the Atlantic coast in Nova Scotia to the Pacific coast in British Columbia.

In 1998 CN purchased the Illinois Central Railroad (ICRR) and a number of smaller US railways. Together these railways had extensive trackage in the central United States along the Mississippi River valley that runs from the Great Lakes to the Gulf of Mexico. Today CN owns about 20,400 route miles of track in 8 Canadian Provinces (the only two not served by CN are Newfoundland & Labrador and Prince Edward Island), as well as a 70-mile stretch of track into the Northwest Territories.

Revenues, Earnings and Dividends

Revenues and Dividends are the most consistent parts of the company's fundamentals while earnings have been a little more sporadic. The payout ratio has also been rising over the years but it seems to be stabilizing in the mid 20% area. 

Year
2016 Est
2015 Est
2014
2013
2012
2011
2010
2009
2008
2007
2006
2005
2004

Revenues
$14.04 Bil
$13.11 Bil
$12.13 Bil
$10.57 Bil
$9.92 Bil
$9.02 Bil
$8.29 Bil
$7.36 Bil
$8.48 Bil
$7.89 Bil
$7.92 Bil
$7.24 Bil
$6.54 Bil

Earnings
$4.80
$4.32
$3.76
$3.10
$3.08
$5.45
$4.51
$3.95
$3.99
$4.31
$3.97
$5.64
$4.41

Dividends
$1.12
$1.00
$0.90
$0.82
$0.74
$0.65
$0.52
$0.44
$0.20
$0.18
$0.14
$0.19
$0.14

Payout Ratio
23.33%
23.14%
23.93%
26.45%
24.02%
11.92%
11.52%
11.13%
5.01%
4.17%
3.52%
3.36%
3.17%

Revenue Growth Rate
1 yr 14.75%
2 yr 10.57%
3 yr 10.26%
4 yr 9.98%
5 yr 10.50%
10 yr 6.51%

Earnings Growth Rate
1 yr 21.29%
2 yr 10.48%
3 yr -11.53%
4 yr -4.45%
5 yr -0.99%
10 Yr -1.59%

Dividend Growth Rate
1 yr 9.75%
2 yr 10.28%
3 yr 11.33%
4 yr 14.69%
5 yr 15.38%
10 Yr 20.45%

The Competition

Canadian National Railway Company is part of the Railroad Industry which is part of the Services Sector of the economy. Below are a few of the major corporations included in this industry that pay a dividend. They are listed in the order of their market capitalization.

1. Union Pacific Corporation  (UNP)
   
2. Canadian National Railway Company  (CNI)
   
3. CSX Corporation  (CSX)
   
4. Norfolk Southern Corporation  (NSC)
   
5. Canadian Pacific Railway Limited  (CP)
   
6. Kansas City Southern  (KSU)
   

My Perspective

I like this company but I've got to admit it isn't my favorite railroad. My favorite would be Union Pacific Railway (UNP). But this is a geographical play on railroads. I own stock in UNP whose basic network is throughout the western US as well as CSX Lines whose network is throughout the eastern US. I'm interested in starting a position in Canadian National Railway (CNI) because the fundamentals are right and it's the largest railway in Canada. Its network expands the entire country of Canada from east to west and with its addition of the Illinois Central Railroad it covers the central portion of the US from Canada to the oil rich Gulf Coast.