Canadian National Railway *New Buy*

Hey folks after taking a week off I am back with a new post. I added a new stock to my portfolio and thought I would share it with you. The stock was purchased in my Tax Free Savings Account (TFSA).

On September 7th I started a position in Canadian National Railway. CN has been on my radar for awhile now, as a dividend investor one thing that attracted me to the company is their streak of 21 years of raising their dividend and that doesn’t appear to be ending anytime soon. CN is also one of the top railroads in North America if not the best.

What Does CN Do?

Canadian National Railway Company is engaged in the rail and related transportation business. The Company’s network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico and serving the cities and ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth (Minnesota)/Superior (Wisconsin), and Jackson (Mississippi), with connections to all points in North America. Its network and connections to all Class I railroads provide its customers access to the three North American Free Trade Agreement nations. It carries over 300 million tons of cargo, serving exporters, importers, retailers, farmers and manufacturers. Its freight includes seven commodity representing a portfolio of goods.

(Source: Google Finance)

I created a few charts for this purchase hope you like them. I chose in my opinion important stats which the company itself views as important metrics.

Let’s get to the charts shall we 🙂

 

Operating Ratio

The operating ratio is a company’s operating expenses as a percentage of revenue. So the lower the better and CN’s ratio has been getting lower and lower.

 

Revenue

 

Revenue By Commodity Group

 

Operating Income

CN’s operating income continues to raise impressively.

 

Free Cash Flow

CN’s free cash flow continues to be very impressive. Back in 2013 the company redefined its free cash flow measure as the difference net cash provided by operating activities and net cash used in investing activities; adjusted for changes in restricted cash and cash equivalents and the impact of major acquisitions, if any.

(Above info was found in the 2013 company annual report)

 

Geographic Exposure

 

Dividend

Above I mentioned that CN has raised it’s dividend for the last 21 years, but if you look at the chart it shows that in 2012 it was $1.50 per share and the next it dropped to $0.86 so what gives you say. Well in 2013 CN split it’s stock 2 to 1 so that is why the chart looks a little weird they did raise the dividend in 2013. CN currently pays a quarterly dividend of $0.4125, and has a yield of 1.64%.

Transaction Details

On September 7th I purchased 15 shares at a price of $99.72 with a $9.99 trading fee my purchase cost me $1,505.79.

So with my 15 shares CN will pay me $24.76 annually.

 

So guys what do you think of my purchase? Do you own CN? Sorry for all the charts thought I would provide you with a visual of some of the company’s metrics. Please feel free to comment below I enjoy reading them.

Thanks for reading

Matthew