Canadian National Railway

I am today reviewing this stock, (TSX-CNR) because it has published its fourth quarterly results and I own this stock. I have owned this stock since 2005 and I have made a return of 12.2% per year on my shares. I have not had this stock for long, so I am only earning 2.8% return on my original investment. However, when you hold this stock for something like 10 years, you could be earning around 8% on your original investment.

One of the nice things about this stock is that the dividends have also been increased during the recent recession. The increases for the last few years have been just under 10%. The 5 year increase in dividends has been just over 20% per year. So, this stock has been rewarding people who invest for the long term. The 10 year growth in dividends is almost as good, coming in at 17.6% per year.

The growth figures on this stock for the financial year ending in 2009 are a mixed bag. Most of the 10 years growth figures are better than the 5 year growth figures. This is because we are just coming out of a recession, so it is not unusual. For example, the growth in cash flow from operations has increased only 1.5% per year over the last 5 years, but it has increased by 8.7% per year over the last 10 years.

Earnings on this stock have been much better. The growth in earnings for the last 5 and 10 years has been over 12% per year. The growth in Total Returns has also been very good. For the last 5 years, it has been 10.9% per year. For the last 10 years, it has been even better at 17.9% per year.

The next thing to talk about is the Asset/Liability Ratios. First, the Liquidity ratio has improved lately and is now higher than either the 5 year or 10 year average. This ratio for the financial year ending in 2009 is 1.20. The 5 and 10 year averages were 0.80 and 0.72. The Asset/Liability Ratios have always been higher and much better. The current ratio is 1.81. This is also higher than the 5 and 10 year averages. The last thing to talk about is the Return on Equity. This has been quite good, even lately. The 5 year average is 18.6%. The ROE for 2009 is a bit lower, but is still good at 16.5%.

I have been pleased with my investment in this stock and will continue to how what stock I own. Tomorrow I will talk about what the analyst say and whether or not the current stock price is good.

Canadian National Railway Company and its operating railway subsidiaries, spans Canada and mid-America, from the Atlantic and Pacific oceans to the Gulf of Mexico, serving the ports of Vancouver, Prince Rupert, B.C., Montreal, Halifax, New Orleans, and Mobile, Ala., and the key metropolitan areas of Toronto, Buffalo, Chicago, Detroit, Duluth, Minn./Superior, Wis., Green Bay, Wis., Minneapolis/St. Paul, Memphis, St. Louis, and Jackson, Miss., with connections to all points in North America. Its web site is www.cn.ca/. See my spreadsheet at www.spbrunner.com/stocks/cnr.htm .

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 www.spbrunner.com/stocks.html for a list of the stocks for which I have put up spreadsheets. Also, look at other investing notes on my website at www.spbrunner.com/investing.html. Follow me on twitter.

I have also updated my index spreadsheet and it is at index portfolio.