New Purchase Choo Choo

cnr

Hello friends, I had a little bit of money sitting in my TFSA account and thought I would put it to good use. On February 19th I bought more shares of Canadian National Railway (ticker: CNR). I have been wanting to add to my position in this stock for awhile now, I thought the price was a little high in the past which made me stop from adding to my position. However after thinking about it I believe this is a great company with a bright future and nobody can predict where the stock will end up in the short and long term.

About CN

In case you haven’t heard of Canadian National Railway, they are the biggest freight carrier in Canada. They currently offer four main services to their customers.

  1. Rail
  2. Intermodal
  3. Trucking
  4. Mariner

Rail

CN has a 20,000-mile network spans Canada and Mid-America, connecting three coasts: the Atlantic, the Pacific and the Gulf of Mexico.

CN-Network-map-EN

(Source: company website)

Intermodal

Internodal offers CN’s customers the choice of shipping via Rail, Truck or ship. They just put your product in shipping containers and you chose the delivery method. CN has intermodal terminals throughout it’s network.

intermodal-terminals-map-en

(Source: company website)

All of the red dots you see are intermodal terminals, they are placed at ports and key cities along its network.

Trucking

CN’s trucking services has a fleet of 8,000 chassis and 8,000 containers, they deliver 1,300 loads a day with a track record of 90% of the loads being on time. Trucking is available in all the ports in Halifax, Montreal, Vancouver and New Orleans.

Marine

The Marine division of CN has 11 ships, nine are located in the Great Lakes or St Lawrence Seaway region these are self-unloading carriers transport dry bulk commodities like iron ore, coal and limestone. CN offers a rail-ferry service with one ship to Labrador and Northern Quebec that transports over 500,000 tons annually. The final ship is on the west coast of Canada and is an Aquatrain. An Aquatrain is a ship that carries rail cars on it, this service departs Prince Rupert in B.C. and goes to Whittier, Alaska.

Stock

The stock is currently has a P/E ratio of 21.23, the yield stands at 1.85%. Don’t let the small yield fool you Canadian National Railway has raised it’s dividend 24 straight years with the following growth rates for one year (10.3%), three years (13.3%), five years (16.2%) and ten years (14.7%). I got the growth rate numbers from a Rob Carrick article in the Globe and Mail that was published on June 8th, 2019 (sorry I don’t have a link to the post). According to Yahoo Finance the payout ratio is currently 36.88% so there is plenty of room for the increases to continue.

The Purchase

On February 19th I purchased an additional 6 shares at a cost per share of $123.32

Dividends

CN currently pays a quarterly dividend on $0.5750 per share so this purchase will increase my annual dividends by $13.80.

Well folks what do you think of the purchase? Do you own shares of CN? Please feel free to comment below.

Thanks

Matthew

 

8 thoughts on “New Purchase Choo Choo

  1. nice man. Good writeup too. Probably my favorite holding. Although I wonder how much these rail closures will hurt earnings. May give a better price in the future. Long term cnr is solid though.
    keep it up Matt
    cheers

    Liked by 1 person

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