Reviewing Canadian National Railway (CNI) and Its Rivals

Canadian National Railway (NYSE: CNI) is one of 28 publicly-traded companies in the “Ground Freight & Logistics” industry, but how does it contrast to its peers? We will compare Canadian National Railway to related businesses based on the strength of its dividends, institutional ownership, valuation, profitability, risk, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of current ratings and price targets for Canadian National Railway and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canadian National Railway 0 12 5 0 2.29
Canadian National Railway Competitors 181 1290 1792 70 2.53

Canadian National Railway presently has a consensus price target of $83.62, indicating a potential upside of 3.17%. As a group, “Ground Freight & Logistics” companies have a potential upside of 10.30%. Given Canadian National Railway’s peers stronger consensus rating and higher possible upside, analysts clearly believe Canadian National Railway has less favorable growth aspects than its peers.

Risk & Volatility

Canadian National Railway has a beta of 1.13, meaning that its share price is 13% more volatile than the S&P 500. Comparatively, Canadian National Railway’s peers have a beta of 1.38, meaning that their average share price is 38% more volatile than the S&P 500.

Dividends

Canadian National Railway pays an annual dividend of $1.32 per share and has a dividend yield of 1.6%. Canadian National Railway pays out 34.4% of its earnings in the form of a dividend. As a group, “Ground Freight & Logistics” companies pay a dividend yield of 1.7% and pay out 36.3% of their earnings in the form of a dividend. Canadian National Railway has raised its dividend for 5 consecutive years.

Profitability

This table compares Canadian National Railway and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canadian National Railway 30.59% 25.42% 10.24%
Canadian National Railway Competitors 10.86% 15.03% 5.33%

Insider & Institutional Ownership

54.5% of Canadian National Railway shares are held by institutional investors. Comparatively, 71.3% of shares of all “Ground Freight & Logistics” companies are held by institutional investors. 2.4% of Canadian National Railway shares are held by insiders. Comparatively, 12.0% of shares of all “Ground Freight & Logistics” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares Canadian National Railway and its peers top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Canadian National Railway $10.50 billion $5.65 billion 21.11
Canadian National Railway Competitors $5.92 billion $1.74 billion -4.29

Canadian National Railway has higher revenue and earnings than its peers. Canadian National Railway is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Canadian National Railway peers beat Canadian National Railway on 8 of the 15 factors compared.

Canadian National Railway Company Profile

Canadian National Railway Company is engaged in the rail and related transportation business. The Company’s network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico and serving the cities and ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth (Minnesota)/Superior (Wisconsin), and Jackson (Mississippi), with connections to all points in North America. Its network and connections to all Class I railroads provide its customers access to the three North American Free Trade Agreement nations. It carries over 300 million tons of cargo, serving exporters, importers, retailers, farmers and manufacturers. Its freight includes seven commodity representing a portfolio of goods.

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