Canadian National Railway Co's Dividend Analysis
Assessing the Upcoming Dividend and Historical Performance
Canadian National Railway Co (NYSE:CNI) recently announced a dividend of $0.85 per share, payable on 2024-03-28, with the ex-dividend date set for 2024-03-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Canadian National Railway Co's dividend performance and assess its sustainability.
What Does Canadian National Railway Co Do?
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Canadian National Railway Co's railway spans Canada from coast to coast and extends through Chicago to the Gulf of Mexico. In 2023, CN generated CAD 16.8 billion in revenue by hauling intermodal containers (23% of consolidated revenue), petroleum and chemicals (19%), grain and fertilizers (19%), forest products (12%), metals and minerals (12%), automotive shipments (6%), and coal (6%). Other items constitute the remaining revenue.
A Glimpse at Canadian National Railway Co's Dividend History
Canadian National Railway Co has maintained a consistent dividend payment record since 1996, distributing dividends on a quarterly basis.
As a dividend aristocrat, Canadian National Railway Co has increased its dividend each year since 1996, showcasing a commitment to providing shareholders with consistent returns. Below is a chart showing annual Dividends Per Share to track historical trends.
Breaking Down Canadian National Railway Co's Dividend Yield and Growth
As of today, Canadian National Railway Co currently has a 12-month trailing dividend yield of 1.82% and a 12-month forward dividend yield of 1.93%, indicating anticipated dividend increases over the next year.
Over the past three years, Canadian National Railway Co's annual dividend growth rate was 11.20%. This rate increased to 11.30% per year over a five-year period, and over the past decade, the annual dividends per share growth rate stands at an impressive 13.50%.
Based on Canadian National Railway Co's dividend yield and five-year growth rate, the 5-year yield on cost for Canadian National Railway Co stock as of today is approximately 3.11%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. Canadian National Railway Co's dividend payout ratio is 0.43 as of 2023-12-31, suggesting a balance between distributing earnings and retaining funds for future growth.
Canadian National Railway Co's profitability rank, which stands at 9 out of 10 as of 2023-12-31, implies strong earnings potential. The company's consistent positive net income over the past decade further solidifies its robust profitability.
Growth Metrics: The Future Outlook
Canadian National Railway Co's growth rank of 9 out of 10 suggests a favorable growth trajectory. The company's revenue per share and 3-year revenue growth rate, averaging 9.60% per year, outperforms approximately 58.58% of global competitors.
The 3-year EPS growth rate of 11.30% per year on average outperforms approximately 48.64% of global competitors. Additionally, the 5-year EBITDA growth rate of 6.70% outperforms approximately 45.81% of global competitors, highlighting the company's capacity for sustained earnings and dividends.
Engaging Conclusion
Considering Canadian National Railway Co's consistent dividend payments, robust growth in dividends per share, prudent payout ratio, and solid profitability and growth metrics, investors can view the company as a potentially stable source of dividend income. As the company continues to navigate the dynamic transportation industry, its commitment to shareholder returns and strategic growth initiatives may position it well for future financial performance.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
