The S&P/TSX Composite Index has been battered since peaking in the spring of 2022. Meanwhile,
consumers and companies alike are feeling the crunch of rising interest rates. The Bank of Canada (BoC)
moved to raise rates again this week, bringing the benchmark interest rate to 3.75%. Many analysts
have warned of the increased risk of a harsh recession in 2023.
In this environment, Canadian investors may want to snatch up historically dependable equities. Today,
I’m going to zero-in on Canadian National Railway (TSX:CNR)(NYSE:CNI). This Montreal-based company
is engaged in the rail and related transportation business. Its shares have climbed 3.3% in 2022 as of
close on October 27. The stock is down 2.5% year over year.
This company released its third quarter fiscal 2022 earnings on October 27. It delivered revenue growth
of 26% to $4.51 billion. CNR was bolstered by an increase in freight rates which it was forced to enact in
response to higher fuel prices. However, operating income surged 44% from the prior year to a record
$1.9 billion.
Net income dropped 14% year-over-year to $1.46 billion. Moreover, earnings per share (EPS) dipped
10% to $2.13. It was “distorted” by a hefty termination fee in fiscal 2021.
CNR stock currently possesses a price-to-earnings ratio of 21. That puts this stock in solid value territory
at the time of this writing. Better yet, it offers a quarterly dividend of $0.733 per share, which represents
a modest 1.8% yield. This is a stock Canadians can trust in the face of an uncertain market and economy.
I’m looking to buy today.
