Canadian National Railway Co. (Toronto symbol CNR) operates Canada’s largest freight rail network, and serves 16 U.S. states. CN is one of the Canadian stock picks we analyze in our Successful Investor newsletter.
In 2010, CN earned $2.1 billion, or $4.48 a share. That’s up 13.5% from $1.8 billion, or $3.92 a share, in 2009. Excluding one-time items in both years, such as an after-tax gain of $131 million on the sale of a southern Ontario rail line, the company earned $1.9 billion, up 28.7% from $1.5 billion in 2009. Earnings per share rose 29.6%, to $4.20 from $3.24, on fewer shares outstanding.
Revenue rose 12.6% to $8.3 billion from $7.4 billion in 2009. Sharply higher freight volumes were the main reason for the revenue increase. The company also raised its fuel surcharges and shipping rates.
All commodity groups saw revenue increases in 2010: coal and automotive both rose 29%, followed by intermodal (containers that can be shipped by rail, ship or truck) and metals and minerals (both up 18%), grain and fertilizers (up 6%), petroleum and chemicals (up 5%), and forest products (up 3%).
CN also raised its dividend by 20.4% to $0.325 from $0.27. The new annual rate of $1.30 yields 1.6%. The company has raised its dividend for 15 consecutive years since it went public in 1995.
CN also plans to buy back up to 3.6% of its outstanding shares in 2011. Share buybacks raise earnings per share and other per-share calculations, and give the remaining shareholders a larger stake in the company.
We’ll update our buy/sell/hold advice on CN and other Canadian stock picks (including rival Canadian Pacific Railway) in our January 28, 2011 Successful Investor Hotline. You can get this hotline and one month free when you subscribe to The Successful Investor today. Click here to learn how.
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