Why Canadian National Railway Is a Top Pick for Long-Term Investors
Stability, Efficiency, and Strategic Growth in the Rail Sector
While the proposed Union Pacific–Norfolk Southern merger dominates headlines, Canadian National Railway (CN) continues to prove why it’s a standout in the freight rail industry—not through flashy deals, but through disciplined execution and strategic foresight. For investors seeking steady, long-term value, CN’s focus on efficiency, geographic diversification, and sustainability makes it a compelling choice.
Operational Excellence: The Power of Precision
CN’s mastery of precision scheduled railroading (PSR) sets it apart. By prioritizing consistency, asset utilization, and speed, CN achieves lower operating ratios and reliable performance—key reasons it maintains strong margins, a healthy dividend yield, and one of the most attractive P/E ratios among Class I railroads.
Strategic Reach: Built for Resilience
CN’s geographic footprint is a major advantage. With extensive networks in eastern and western Canada, deep access to the US Midwest and Gulf Coast, and critical port connections, CN is well-positioned to capitalize on transcontinental trade. Unlike US railroads, CN isn’t as exposed to domestic regulatory shifts, giving it added stability in uncertain markets.
Sustainability as a Competitive Edge
CN isn’t just keeping pace with sustainability trends—it’s a leader. Its investments in cleaner locomotives, fuel efficiency, and transparent ESG reporting have earned it spots on global sustainability indices. These efforts aren’t just for show; they reflect a long-term commitment to reducing costs and mitigating risks tied to climate and regulatory pressures.
The Bottom Line for Investors
While mergers like UP–NS may generate political theatrics and short-term market buzz, CN (NYSE: CNI / TSX: CNR) offers something more valuable: predictable growth. Its focus on infrastructure upgrades, adaptability to market shifts, and conservative financial management make it a rare blend of resilience and opportunity. For investors who prioritize fundamentals over hype, CN remains a top-tier holding in the transportation sector.
Postscript: A Personal Rail Legacy
Today’s three-part railroad story hits close to home—literally. I was born in 1942 just a few hundred meters from Lambton Yard, built in 1913 at Runnymede and St. Clair in Toronto’s west end. Once a bustling Canadian Pacific Railway (CPR) hub, it featured a roundhouse and turntable system for servicing and turning locomotives—a critical piece of rail infrastructure in its day.
My family’s history is intertwined with the rails. My grandfather, Luigi, arrived in Canada as an undocumented immigrant after being turned away by the US at 18. He hopped a train to Toronto and, when it stopped at the rail yard, landed a job with CPR—where he spent 50 years managing inventory of damaged rails. Upon retirement, CPR secured him an unexpected gift from the Canadian government: citizenship.
Later, my father—a WWII Army sergeant when I was born—bought property at the end of a rural dirt road named Old Rail Road, 70 miles from Toronto. A fitting full-circle moment for our family’s connection to the tracks. As they say in railroading: What comes around, turns around.