Friday, May 8, 2009

Canadian National Railway 2

I am continuing my reviewing this stock (TSX-CNR) today. I consider this stock one of my backbone stocks for my portfolio and it is on all the lists of good dividend paying stocks that I follow. First, I looked at Insider Selling and Insider Buying. What I found was lots of Insider Selling. This selling appeared to be all in options. At some $23 million net selling, this represents about .1% of the shares outstanding for this stock. I do not think that this tells us anything. There is some buying of shares under the Company’s Plan to allow staff to buy shares.

The current yield at just over 2% is above the 5 year average of 1.5%. The current P/E at 13.3 is below the 5 year average of 13.8, but the 5 year average low is 11.5. So the P/E is at a reasonable level, but it is not showing this price as being a great buy. The dividend yield is probably a better indicator, as earnings are currently depressed in our economic recession. Also, this stock price is just around the Graham Price. This is also a good indicator showing the current price is very reasonable.

There are lots of analysts that follow this stock. Looking at analyst recommendations, there are lots of Strong Buys, Buys and Holds on this stock. The consensus recommendation is a Buy. (See my site for information on analyst ratings.)

When looking at the charts, this stock has done better than the TSX and the Industrials Index for all periods over 1 year. For the YTD period and the 3 month and 6 months periods, it has done as well as both these indexes.

As I said yesterday, I own this stock and I have been happy with the return I have received, both in dividends and in the increase in value in this stock. I will continue to own this stock.

They 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 See my spreadsheet at

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 for a list of the stocks for which I have put up spreadsheets.

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