Canadian National Railway
On the face of it, CN Rail (TSX:CNR)(NYSE:CNI) is a less attractive stock than Manulife. With a balance sheet that could do with some sprucing up, CN Rail doesn’t look as good on paper as the nation’s favourite insurer.
For instance, CN Rail’s dividend yield of 1.85% is lower than Manulife’s, and it’s not as good value for money, trading above its fair value with overheated multiples.
However, taken together, CN Rail is an exceptional wide-moat pick that the casual investor can buy once and forget about in a stock portfolio.
For one thing, CN Rail has an amazingly resilient share price – great news for any investor who wants to buy stocks and save tax-free during the next recession.
That dividend is reliable, too: CN Rail has a dependable track record of payments, and the payout has increased over the last 10 years. With a payout ratio of 37%, more growth is possible, too. Total shareholder returns in five years could be in the region of 56%, making for a solid buy-and-hold option.
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