Company Overview

The Canadian National Railway Company (CN) is a Canadian Class I freight railway headquartered in Montreal, Quebec. It operates an extensive network serving Canada and the Midwestern and Southern United States. CN is one of Canada's two primary freight rail companies, alongside Canadian Pacific Kansas City (CPKC).

CN is the largest railway in Canada by both revenue and network size, spanning the country from the Atlantic coast in Nova Scotia to the Pacific coast in British Columbia with approximately 20,000 route miles of track. In the late 20th century, CN significantly expanded its capacity in the United States through acquisitions, including railroads like the Illinois Central.

The company has a significant history, having been a Canadian Crown corporation (government-owned) from its founding in 1919 until its privatization in 1995. Today, CN is a publicly traded company. As of July 2024, it employs 24,671 people and has a market capitalization of approximately US$75 billion.

Business Operations and Service Portfolio

Canadian National Railway Company, along with its subsidiaries, is engaged in rail, intermodal, trucking, and related transportation businesses across Canada and the United States. The company offers a comprehensive suite of services:

Service Portfolio

- Rail Services: Includes equipment management, custom brokerage, transloading and distribution, business development and real estate, and private car storage services.

- Intermodal Services: Features temperature-controlled cargo, port partnerships, transloading and distribution, logistics parks, customs brokerage, and trucking solutions.

- Specialized Services: Encompasses door-to-door delivery, import/export drayage, interline services, flatbed trucks, on-deck mobile transport trays, expedited cargo, permit/overweight services, and integrated supply chain solutions.

Market Segments Served

CN's services cater to a diverse range of industries, including:

- Automotive

- Coal

- Fertilizers

- Temperature-Controlled Cargo

- Forest Products

- Dimensional Loads

- Grain

- Metals and Minerals

- Petroleum and Chemicals

- Consumer Goods

- Third-Party Logistics (3PL)

Financial Performance

2024 Financial Highlights

For the full year 2024, TSX: CNR reported total revenue of $17.05 billion, representing a modest increase of 1.30% compared to the previous year's $16.83 billion. However, earnings saw a notable decrease of -20.92%, totaling $4.45 billion.

The revenue breakdown for 2024 illustrates a diversified operational base:

- Intermodal containers: 22% of consolidated revenue

- Petroleum and chemicals: 20%

- Grain and fertilizers: 20%

- Metals and minerals: 12%

- Forest products: 11%

- Automotive shipments: 5%

- Coal: 5%

Q3 2024 Performance Insights

The third quarter of 2024 presented mixed operational and financial outcomes. CN reported a 2% increase in Earnings Per Share (EPS) for the quarter, signaling resilience amidst challenges. Revenue for the quarter stood at CA$4.11 billion, up 3.1% from the previous quarter and in line with analyst estimates. EPS was also in line with analyst expectations.

However, the company encountered significant operational hurdles during this period:

- Increased Expenses: Labor disruptions and the impact of Alberta wildfires led to additional operational expenses, adversely affecting profit margins.

- Intermodal Volume Decline: Domestic intermodal volumes decreased by 14%, attributed to labor uncertainty, market softness, and an oversupply of truck capacity.

- Carload Volume Dip: Overall carload volumes slipped by 2%, primarily driven by lower domestic intermodal, automotive, and short-haul iron ore shipments.

Dividend Information

CN maintains a consistent and attractive dividend policy for its shareholders. As of recent data, the trailing twelve months (TTM) dividend yield is 2.71%. The company distributes dividends on a quarterly basis, with the last recorded payment of $0.89 on June 30, 2025.

The company's dividend growth history indicates a commitment to shareholder returns:

- 1-Year Growth Rate: 5.03%

- 3-Year Average Growth Rate: 6.58%

- 5-Year Average Growth Rate: 9.07%

Strategic Position and Outlook

Growth Opportunities

CN is well-positioned to capitalize on several growth avenues. The company has a strong pipeline of collaborative opportunities with customers, expected to contribute more than half of its future volume growth. Furthermore, intermodal shipping is poised to benefit from favorable long-term trends, including structural constraints on trucking capacity expansion and a strategic shift by shippers towards rail for cost optimization and efficiency gains.

Market Challenges

The current operating environment presents several headwinds for CN:

- Macroeconomic Softness: A softer-than-anticipated macroeconomic climate is impacting merchandise businesses, particularly in construction-related commodities and the automotive sectors.

- Tariff Impact: Potential U.S. tariffs could temper overall economic growth in both the U.S. and Canada across retail and industrial markets, thereby pressuring CN's underlying freight demand.

Future Revenue Projections

Looking ahead, CN's revenue is projected to grow at an average annual rate of 5.2% over the next three years. This growth forecast, while positive, is slightly lower than the 7.7% growth forecast for the broader North American Transportation industry.

Recent Corporate Developments

CN continues to make strategic investments in its operational network and safety initiatives. Recent developments include:

- Infrastructure Investment: Plans include approximately US$110 million for infrastructure upgrades in Wisconsin and approximately US$50 million in Louisiana, as part of its broader 2025 capital investment program.

- Safety and Partnerships: The company is actively focusing on enhancing safety protocols through awareness campaigns and forging strategic partnerships designed to improve and expand its service offerings across its extensive North American network.