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Canadian National Signs MOU to Acquire 50 Electric Trucks

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Canadian National Railway Company (CNI - Free Report) has signed a memorandum of understanding (“MOU”) with The Lion Electric Co. to acquire 50 zero-emission trucks for intermodal operations. These electric trucks, which will be used in the company’s intermodal terminals in urban areas, will help in reducing greenhouse gas emissions.

Last April, the company launched a pilot program to test Lion Electric's trucks. The zero-emission trucks have been tested for different tasks ranging from urban delivery and container shuttle service, to port operations across Canadian National’s network. These trucks, which do not cause any noise pollution, are expected to remove 100 tons of greenhouse gas emissions from the road annually. These electric trucks are built in a way that will help withstand the North American weather and road conditions.

Price Performance

Despite coronavirus-induced freight softness, shares of Canadian National have held up well. Shares of the company have rallied 15.6% so far this year, outperforming the industry’s 9.8% increase.  This outperformance can be attributed to the company’s solid track record with respect to grain transportation. The company moved 15 million metric tonnes (“MMT”) of Canadian grain in the first half of the year, thereby bettering its previous record of 13.9 MMT.  Also, Canadian National set a record by moving 8.15 MMT of Canadian grain during second-quarter 2020. With this, the company also broke its previously set record of moving 8.08 MMT Canadian grains. Notably, revenues in the Grain and Fertilizers segment inched up 2% in first-half 2020. The company moved more than 30 million MMT of grain from across Canada during the 2019-2020 crop year, which is a record.

 

Zacks Rank & Key Picks

Canadian National carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader Transportation sector are Knight-Swift Transportation Holdings Inc (KNX - Free Report) , Landstar System Inc (LSTR - Free Report) and Canadian Pacific Railway Limited (CP - Free Report) . While Knight-Swift and Landstar sport a Zacks Rank #1 (Strong Buy), Canadian Pacific carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shares of Knight-Swift, Landstar and Canadian Pacific have rallied 15.6%, 16.9% and 16% so far this year respectively.

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