Tuesday, August 5, 2008

Canadian National Railway 2

A lot of analysts have a buy rating on this stock because of the June 30, 2008 quarterly report. With the June 30, 2008 quarterly report, we can see revenue is up but earnings are down. The current P/E rating of 13.2 is below the 5 year average of 14.6. The dividend yield is higher at 1.6% than the 5 year average of 1.29. The dividend yield is significant as the yield tends to go towards the average and for this to happen, the stock price must rise.

With this June report, the Current Asset/Current Liability ratio has improved to 1.00 from .66. This means that there are sufficient current assets to cover current liability. The Asset/Liability Ratio is still a healthier 1.71, as any ratio above 1.50 is good.

Even though the economy is weak in US and Canada, this company is doing well. I feel that although this stock is not cheap, it is at a reasonable price and therefore might be a buy. The Revenue growth is a good sign, as revenue has not kept pace with earnings growth. The other negative I see is for June 30, 2008 the accrual ratio is high at 5.77. I am sure that this stock will have a reasonable growth going forward.

CNR have railways lines that cross the North American continent and serve ports on the Atlantic, Pacific and Gulf coasts. They link customers to all three NAFTA nations. Its web site is http://www.cn.ca/about/en_about.shtml. See my spreadsheets on this company at http://www.spbrunner.com/stocks/cnr.htm. I have reloaded my spreadsheet with figures from June 2008 quarterly report and 2008 estimates.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at http://www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets on web site.

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