“What to buy, what to buy”. A though every investor has from time to time. Especially in markets we have at the moment. Even with the small correction in the US we just went through prices are still high. However, I am watching some stocks for quite a long while now. And among these stocks there are a couple of stocks I would really really like to own. One of them is Canadian National Railway. Last year I made an analysis on the company. I came to a purchase price of CAD 90,00.
After making the analysis CNR only went up. Just like the rest of the markets. However, recently they have come back to fair value. The company is investing a lot for the coming 3 years in new locomotives and other hardware which will put pressure on results. However, in the long term this should increase efficiency and I like that idea. They are not back at 90,00, but since we are a year later I’m very happy with the current price. So I decided to go for it!
There are a couple of reasons why I really like the company. First of all, the company has a big moat. Try to replicate a railway at the same route as a competitor. First of all, it’s very expensive. Secondly it’s just not smart and maybe not even possible. Further, the company is very shareholder friendly. They pay a dividend that increases fast and they spend nice money on share buybacks. The growth of the company is great in the long run and I see a bright future for the company.
I purchased 17 shares of Canadian National Railway (CNR) for a price of CAD 95,96 a share. Together with my fees of CAD 17,29 my cost basis is CAD 96,98.
This buy ads CAD 30,94 of forward dividends per year to my portfolio. After taxes that netts me CAD 26,30 per year in dividends which is € 16,84 in Euro’s with the current conversion rate. My forward income excluding taxes for my portfolio is now € 519,39 per year and after taxes.
What do you think of this purchase? Do you have CNR in your portfolio? Don’t hesitate to comment below!