Canadian National Railway: Don't Play On Railroad Tracks, Own Them

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Treading Softly

Investing Group

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Summary

Canadian National Railway offers a robust, coast-to-coast network driving essential freight movement and resilient financial performance.
CNI’s Q4 2025 saw 2% revenue growth, 14.3% adjusted EPS growth, and a 250 bps operating ratio improvement to 60.1%, fueled by record grain volumes and intermodal strength.
With capex set to decline by 500 million CAD and a new buyback program, CNI is positioned for enhanced free cash flow and continued dividend growth (~8% annually).
At a forward P/E of 17.9, CNI trades at an 11% discount to fair value, supporting a projected 15% total return through March 2027.
This idea was discussed in more depth with members of my private investing community, The Dividend Kings. Learn More »

Railway line leading into the distance — Gary Yeowell/DigitalVision via Getty Images

Co-authored by Kody’s Dividends

What is your most common interaction with a freight train? If you are like the vast majority of Americans, then likely it’s when it intersects the roadway you’re driving on, and you’re stuck watching it go by before you

This article was written by

Treading Softly

Scott Kaufman, aka Treading Softly, learned about investing firsthand from over a decade of financial sector experience. He is the lead analyst for Dividend Kings providing actionable insight into high quality dividend growing and undervalued opportunities. His focus is to see a bountiful harvest of cash dividends and strong capital gains, providing a robust total return.

Analyst’s Disclosure: I/we have a beneficial long position in the shares of CNI either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Kody's Dividends, Justin Law, and Rachel Kaufman are part of the Dividend Kings team

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Source: Canadian National Railway: Don't Play On Railroad Tracks, Own Them – Read full article at Seeking Alpha