Recent buy: Canadian National Railway (CNR)

“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.

 

 

Purchase

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!

8 thoughts on “Recent buy: Canadian National Railway (CNR)”

    1. I waited for 90 as well, but I wanted a starter position, so I thought this price is nice in the long term to start a position. If it ever dips, who knows I’ll add as well. 🙂

      Good luck with the investment!

    1. Thank you!

      People are talking about the dip in the US. But if you look at the charts, then we had an irrational increase in value in January and the only thing what happened is that the increase corrected to more rational levels. But the stocks are still to expensive to my taste (with some exceptions).

      However, I always wanted CNR and I think it’s at fair value now. Is it a bargain? Probably not. But look at the history of the company. It is almost never at bargain level. Only at fair value or over valued.

  1. Awesome stock. Its a Canadian Dividend All-Star with 22 years of dividend increases. Definitely a good buy.

    “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”

    Whereas I agree with both points … there is always risk. For e.g. if air travel becomes really cheap and fast … it could potentially destroy the rail road industry. Established brick and mortar stores like Target are dividend aristocrats with wide moat. With Amazon, they are no longer secure and trying to reinvent themselves. Same is true for any industry 🙂

    1. You are completely right. There is always a risk. But I see it as minimal, so it’s worth investing in. However, just as with every stock, you always have to keep monitoring the big picture!

    1. Thank you for the comment and thank you for the correction of the typos! I already corrected them. As you can probably notice, English is not my native language so I can miss some spelling errors more easily.

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