Canadian National Railway Company (TSX:CNR) has long been considered one of the best companies on the TSX for decades due to the stability of Canadian National’s underlying business as well as the predictable and stable growth of both earnings and dividends over time.
While Canadian National continues to reinvest much of the company’s earnings back into the business (and it must, due to the nature of railroads), the business has provided a small, yet lucrative, dividend for investors who have decided to hold onto this equity over time. Over the past 18 years, this railroad has grown its dividend more than 4,100% (41 times) its original dividend value, reflecting much of the economic growth North America has seen over this time.
Indeed, railroads have long been considered a long-term investor’s friend due to the close ties railroads share with an economy in a given area. The reality today remains such that the vast majority of goods are still transported via rail due to the significant cost savings of railroads over other forms of transportation. With economic growth in North America expected to continue in the long-term at the 3% per year level, investors who buy Canadian National at today’s levels can expect decent and stable capital and dividend appreciation over time.
Long-term growth prospects aside, one of the aspects of Canadian National’s business that appeals to me most is safety. Few equities on the market today have the same safety profile as Canadian National, and investors should consider this company accordingly.
Invest wisely, my friends.
