Why is CN Rail so Expensive?

A long history of performance that may be worth waiting for.

Andrew Willis 12 November, 2021 | 4:38AM
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Andrew Willis: We like CN Rail. In fact, it’s the best-performing stock in our coverage universe over a 20-year time period! Railroads are rather essential, and when you’re the only train in town for much of Canada, you tend to stay in demand. And investors love it.

But being so intertwined with an economy as a whole means you share more of the risks. Equity analyst Matthew Young says CN Rail is exposed to the health of the Canadian and U.S. economies, and there is still uncertainty as to how well the industrial sector will recover post-pandemic.  

And just as the company pushes through the pandemic, the winter weather season could make it difficult to deliver on investor expectations. Perhaps, for now, investors are better waiting until both the storms of the pandemic and winter are over – and the snow is cleared from the tracks – before getting aboard.

For Morningstar, I’m Andrew Willis. 

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Canadian National Railway Co129.48 USD2.60Rating
Canadian National Railway Co166.10 CAD2.59Rating

About Author

Andrew Willis

Andrew Willis  is Senior Editor for Morningstar.ca. Follow him on Twitter @AndrewWillisCDN.

 

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