Canadian National Railway 2

On my other blog I am today writing about Saving For Retirement...continue...

I own this stock of Canadian National Railway (TSX-CNR, NYSE-CNI). I originally bought this stock in 2005 and in 2009 for my trading account. To date, I have made 16.52% per year on this stock. For this stock, of my total return some 1.63% is in dividends and 14.89% is in capital gains.

When I look at the Insider Trading report, I find $73.3M of insider selling and $3.2M of insider buying. Some $24.6M of the insider selling is by the CEO. Not only are there options under this company there are also Deferred Share Units and Restricted Share Units. Selling seems to be in connection with options. The company is also buying back shares for cancellation.

The CEO has shares worth $2.9M, and has options are worth $126.6M. The CFO has shares worth $0.2M and has options worth $30M. An officer has shares worth $0.3M and has options worth $3.8M. A director has shares worth $1.9M and has options worth $3.9M. This is just to give you an idea on insider share ownership and option values. The CEO owns 6.8% of the outstanding shares. (See my blog entry on stock options.)

The 5 year low, median and high median Price/Earnings per Share Ratios are 11.87, 13.49 and 14.84. The current P/E is 16.08 based on a $99.07 stock price and 2013 earnings of $6.16. I get a Graham Price of $60.37. The 10 year low, median and high median Price/Graham Price Ratios are 1.02, 1.20 and 1.35. The current P/GP Ratio is 1.64.

I get a 10 year Price/Book Value per Share Ratio of 2.52 and a current one of 3.77. The current ratio is almost 50% higher than the 10 year ratio. I get a 5 year median dividend yield of 1.80% and a current one of 1.51 a yield some 16% higher.

All my tests show that the stock price is high. It is not extraordinarily high, but still high.

When I look at analysts' recommendations I find Buy, Hold and Underperform recommendations. The consensus, as there are a lot more Hold recommendations than anything else is a Hold recommendation. The 12 months consensus stock price is $95.40. This is a value below the current stock price and suggests a loss of 2.91% with a capital loss of 3.71 and dividends of 1.51%.

One analyst with a Hold recommendation gave a 12 month stock price of $104, and thought that CNR deserved a premium over other railway stocks. Another analysts thought the stock was a bit pricey and gave it an Underperform (or partial sell) rating. This company is well thought of. Analysts are impressed by the 15% dividend increase in 2012 and that the company has raised dividends for 17 years in a row.

The web site Seeking Alpha has the recording of the management discussing the Q4 2012 results. For the financial post Scott Deveau commented on the 4th quarter results for this company. He says that CNR completed a record year.

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 here CNR. See my spreadsheet at 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 for stocks followed and investment notes. Follow me on Twitter or StockTwits.