Stock of the Day

August 21, 2023

Canadian National Railway (CNI)

$103.98
+$0.15 (+0.1%)
Market Cap: $65.23B

About Canadian National Railway

Canadian National Railway Company, together with its subsidiaries, engages in the rail, intermodal, trucking, and marine transportation and logistics business in Canada and the United States. The company provides rail services, which include equipment, custom brokerage services, transloading and distribution, business development and real estate, and private car storage services; and intermodal services, such as temperature controlled cargo, port partnerships, and logistics parks. It offers trucking services, such as door-to-door services, import and export dray, interline services, and specialized services, comprising flatbed trucks, on-deck mobile transport trays, expedited cargo, and permit/overweight services; and supply chain services. It serves automotive, coal, fertilizers, temperature controlled cargo, forest products, dimensional, grain, metal and minerals, petroleum and chemicals, consumer goods, and third party logistics applications. The company operates a rail network of approximately 20,000 route-miles of track and shipping spanning. Canadian National Railway Company was incorporated in 1919 and is headquartered in Montreal, Canada.

Canadian National Railway Bull Case

Here are some ways that investors could benefit from investing in Canadian National Railway:

  • Canadian National Railway has recently increased its quarterly dividend to $0.6159, reflecting a commitment to returning value to shareholders. This represents an annualized dividend yield of 2.43%, which can be attractive for income-focused investors.
  • The stock is currently trading at $101.53, which is below the average target price of $124.19 set by analysts, indicating potential for price appreciation.
  • Canadian National Railway has a strong return on equity of 22.48%, suggesting effective management and profitability, which can be appealing to investors looking for financially sound companies.
  • With a market capitalization of approximately $63.85 billion, Canadian National Railway is a large and established player in the transportation sector, providing stability and reliability for investors.
  • The company has a consensus rating of "Moderate Buy" from analysts, with a mix of buy and hold ratings, indicating overall positive sentiment towards its future performance.

Canadian National Railway Bear Case

Investors should be bearish about investing in Canadian National Railway for these reasons:

  • Recent earnings results showed that Canadian National Railway missed the consensus estimate by $0.09, reporting earnings per share of $1.30 instead of the expected $1.39, which may raise concerns about its short-term performance.
  • The stock has experienced volatility, with a one-year high of $134.02 and a low of $98.69, indicating potential risks associated with price fluctuations.
  • Canadian National Railway has a debt-to-equity ratio of 0.94, which, while manageable, suggests that the company is utilizing a significant amount of debt to finance its operations, potentially increasing financial risk.
  • Analysts have issued a mix of ratings, including two sell ratings, which may indicate uncertainty about the company's future growth prospects.
  • The company's current ratio of 0.66 and quick ratio of 0.48 suggest potential liquidity issues, meaning it may struggle to meet short-term obligations without selling inventory.

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