Yahoo Finance Canadian National Railway Co's Dividend Analysis
An In-depth Look at the Upcoming Dividend and Historical Performance
Canadian National Railway Co (NYSE:CNI) recently announced a dividend of $0.85 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-07. 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 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. The company has increased its dividend each year since 1996, earning it the status of a dividend aristocrat. Below is a chart showing annual Dividends Per Share for tracking 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 1.92% and a 12-month forward dividend yield of 1.97%, indicating an expected increase in dividend payments over the next 12 months. Over the past three years, the company's annual dividend growth rate was 11.20%, extending to 11.30% per year over five years, and an impressive 13.50% over the past decade. Based on Canadian National Railway Co's dividend yield and five-year growth rate, the 5-year yield on cost of Canadian National Railway Co stock as of today is approximately 3.28%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. As of 2024-03-31, Canadian National Railway Co's dividend payout ratio is 0.45. The company's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Canadian National Railway Co's profitability 9 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
Ensuring the sustainability of dividends requires robust growth metrics. Canadian National Railway Co's growth rank of 9 out of 10 suggests a good growth trajectory relative to its competitors. The company's revenue per share and 3-year revenue growth rate of approximately 9.60% per year outperforms about 51.09% of global competitors. Additionally, the company's 3-year EPS growth rate of approximately 11.30% per year and 5-year EBITDA growth rate of 6.70% further demonstrate its capability to sustain dividends.
Conclusion: A Promising Outlook for Dividend Investors
Canadian National Railway Co's consistent dividend payments, robust dividend growth rate, manageable payout ratio, strong profitability, and solid growth metrics paint a promising picture for current and potential investors. These factors not only support the sustainability of dividends but also suggest a healthy financial trajectory for the company. Investors seeking to diversify their portfolio with a reliable dividend-paying stock may find Canadian National Railway Co an attractive option. GuruFocus Premium users can explore further by using the High Dividend Yield Screener.
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.
