Canadian National Railway Company (CNI): A Bull Case Theory 

We came across a bullish thesis on Canadian National Railway Company on Value investing subreddit by TroubleFew8368. In this article, we will summarize the bulls’ thesis on CNI. Canadian National Railway Company’s share was trading at $96.94 as of October 7th. CNI’s trailing and forward P/E were 18.14 and 15.90 respectively according to Yahoo Finance.

Canadian National Railway (CNI) stands out as a compelling example of a long-term compounder in the transportation sector, despite railroads often being overlooked by investors. The business benefits from inherent structural advantages: high capital costs, regulatory hurdles, and land rights create a natural monopoly, making entry for competitors nearly impossible. Rail remains the most cost-effective and energy-efficient mode of long-distance freight transport, giving operators like CNI durable pricing power. Many contracts include fuel surcharges and inflation pass-throughs, protecting margins across economic cycles.

CNI’s network is unmatched, spanning the Pacific, Atlantic, and Gulf of Mexico, providing a strategic geographic footprint no other Class I railroad can replicate. Its diversified freight mix—spanning grain, petroleum, intermodal, and forestry products—reduces reliance on any single commodity, while strong operating discipline drives industry-leading efficiency and operating ratios. The company also benefits from structural growth in cross-border trade among the U.S., Canada, and Mexico, further enhancing its long-term positioning. Capital allocation is disciplined, supported by robust free cash flow that funds dividends and share buybacks without compromising reinvestment into track upgrades, locomotives, and technology.

Every dollar reinvested strengthens the moat, increasing the gap competitors would need billions to overcome. With net revenues reaching $4.27 billion and a long runway for freight rail as a cornerstone of continental logistics, CNI combines pricing power, operational excellence, strategic reach, and financial durability, making it a resilient and high-quality business. For long-term investors seeking reliable growth and compounding potential, CNI exemplifies how structural advantages, disciplined operations, and prudent capital allocation can generate outsized returns over decades.

Previously we covered a bullish thesis on Canadian National Railway Company (CNI) by Max Dividends in May 2025, which highlighted the company’s wide-moat positioning, essential role in North American freight, and consistent dividend growth despite tariff-related setbacks. The company’s stock price has depreciated slightly since our coverage. The thesis still stands as CNI’s durable fundamentals remain intact. TroubleFew8368 shares a similar perspective but emphasizes CNI’s structural advantages, diversified freight mix, and disciplined capital allocation.

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Disclosure: None.