Best Railway Stock: CNR or CP

Dividend Earner

Dividend Earner

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2 min read Affiliate Disclosure

For Canadians, there are only two options to invest in the railway oligopoly, and they are either Canadian Pacific or Canadian National Railway. They not only cover Canada from coast to coast but also part of the US.

To this day, railway transportation is still one of the most cost-effective ways to move goods across North America. It makes for a business worthy of investing and the question at hand is which one should you buy?

Railway Stocks Overview

TSE CNR SMALL

Canadian National Railway

tse:cnr | Industrials | Railroads

TSE CP SMALL

Canadian Pacific Railway

tse:cp | Industrials | Railroads

CNR vs CP – Which is the better buy today?

Both companies are solid now after being managed by Hunter Harrison (RIP). Canadian Pacific Railway was behind for a while but the management team has taken control back.

If you prefer stability, I would suggest Canadian National Railway as they have been more consistent and that’s why it scores higher due to consistency over ten years.

On the other hand, CP has a lower P/E and a lower dividend payout ratio, giving it higher potential growth. Overall, CNR covers more ground across North America through its railway, but CP is present in all the major stations in Canada.

Both have dividend growth in the double digit so you may chose the highest yield of the two stocks for a new position but then you probably want to add enough to DRIP if you have many years ahead of you. If you are approaching retirement and living on the income, the highest yield is probably good enough.

CNR.TO vs CP.TO vs Indexes 2021