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Here's Why Investors Should Retain Canadian National Stock Now
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Key Takeaways
CNI reduced total GHG emissions by 4% and won awards for Falcon Premium cross-border intermodal service.
CNI announced $85M Michigan rail upgrades, part of the $295M U.S. capital plan targeting network efficiency.
Operating costs up 3.3% in Q1 2025, and the current ratio fell to 0.62, reflecting ongoing liquidity pressure.
Canadian National Railway (CNI - Free Report) is benefiting from its encouraging sustainability efforts, boosting the company’s prospects. Shareholder-friendly initiatives are also commendable. However, the company is grappling with high operating expenses and weak liquidity.
Factors Favoring CNI
CNI's sustainability initiatives are encouraging, showing meaningful progress across key environmental, social and economic areas. The company reduced total Scope 1, 2 and 3 GHG (Greenhouse Gas) emissions by 4% and reached 27% of its 2030 target for Scope 1 and 2. It improved operational safety with an 8% drop in the accident rate, though the 8% rise in personal injury frequency signals a need for continued focus on worker safety.
Canadian National Railway also launched its first Indigenous Reconciliation Action Plan, setting 16 measurable commitments. With more than $15 billion in economic value distributed and $3.5 billion in capital investments, CNI continues to drive growth responsibly. Its inclusion in the 2025 Best 50 Corporate Citizens list by Corporate Knights validates its strong ESG performance.
Moreover, Canadian National Railway’s Falcon Premium intermodal service earned the Silver Container Award from Mexico’s AMTI (“Asociación Mexicana del Transporte Intermodal “) for leading the way in sustainable and efficient cross-border transportation. Working with Union Pacific and Grupo México Transportes, CNI developed Falcon Premium to provide a seamless, all-rail service that connects Canada, the United States and Mexico. The service delivers truck-like reliability while reducing greenhouse gas emissions by up to 75%. This award reinforces Canadian National’s active role in driving innovation, improving supply-chain performance and promoting environmentally responsible logistics across North America.
CNI’s 2025 capital investment program demonstrates a strong commitment to modernizing North America’s rail infrastructure and supporting long-term sustainable growth. With a planned $85 million investment in Michigan alone, Canadian National is targeting key upgrades in cities like Lansing, Battle Creek and Flint to enhance rail yard operations and intermodal capacity. Across the United States, CNI is investing approximately $295 million in states, including Illinois ($170M), Mississippi ($75M), Tennessee ($30M) and Indiana ($20M), focusing on track maintenance, technology, capacity building and network resiliency. These strategic investments follow significant prior-year spending, such as $77 million in Minnesota in 2024, reinforcing the company’s ongoing efforts to build a safer, more efficient and environmentally responsible rail network.
CNI’s consistent efforts to reward its shareholders via dividends and buybacks are encouraging and highlight the company's financial strength. In 2022, CNI paid dividends of C$2.00 billion and repurchased shares worth C$4.71 billion. In 2023, CNI paid dividends of C$2.07 billion and repurchased shares worth C$4.55 billion. During 2024, CNI paid dividends of C$2.14 billion and repurchased shares worth C$2.60 billion. During the first quarter of 2025, CNI paid dividends of C$557 million and repurchased shares worth C$151 million.
CNI: Key Risks to Watch
Canadian National Railway is facing mounting financial pressure as rising expenses and weak liquidity continue to strain its performance. The company's operating costs have consistently remained high, climbing from $10.27 billion in 2022 to $10.8 billion in 2024, a clear upward trend that continued into the first quarter of 2025 with a 3.3% year-over-year increase.
These escalating expenses strain profitability and operational efficiency, especially in an industry where cost control is critical to maintaining margins.
Compounding this issue is CNI’s weak liquidity position. The company’s current ratio (a measure of liquidity) has remained below 1.0 for several years, indicating it does not have sufficient short-term assets to cover its short-term liabilities. The ratio dropped from 0.84 in 2022 to 0.61 in 2023, and although it slightly improved to 0.66 in 2024, it declined again to 0.62 in the first quarter of 2025. This sustained low liquidity heightens financial risk, potentially limiting CNI’s flexibility to manage unexpected costs or invest in growth opportunities.
Together, rising costs and weak liquidity present significant headwinds that the company must address to restore investor confidence and maintain long-term financial stability. Owing to such tailwinds, the company’s shares have declined 11.4% year over year compared to the Transportation - Rail industry’s 1% growth.
SKYW has an expected earnings growth rate of 19.4% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 17.1%. Shares of SKYW have risen 26.5% year over year.
AL currently carries a Zacks Rank of 2.
AL has an expected earnings growth rate of 9.6% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 5.2%. Shares of AL have rallied 25.8% year over year.
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Here's Why Investors Should Retain Canadian National Stock Now
Key Takeaways
Canadian National Railway (CNI - Free Report) is benefiting from its encouraging sustainability efforts, boosting the company’s prospects. Shareholder-friendly initiatives are also commendable. However, the company is grappling with high operating expenses and weak liquidity.
Factors Favoring CNI
CNI's sustainability initiatives are encouraging, showing meaningful progress across key environmental, social and economic areas. The company reduced total Scope 1, 2 and 3 GHG (Greenhouse Gas) emissions by 4% and reached 27% of its 2030 target for Scope 1 and 2. It improved operational safety with an 8% drop in the accident rate, though the 8% rise in personal injury frequency signals a need for continued focus on worker safety.
Canadian National Railway also launched its first Indigenous Reconciliation Action Plan, setting 16 measurable commitments. With more than $15 billion in economic value distributed and $3.5 billion in capital investments, CNI continues to drive growth responsibly. Its inclusion in the 2025 Best 50 Corporate Citizens list by Corporate Knights validates its strong ESG performance.
Moreover, Canadian National Railway’s Falcon Premium intermodal service earned the Silver Container Award from Mexico’s AMTI (“Asociación Mexicana del Transporte Intermodal “) for leading the way in sustainable and efficient cross-border transportation. Working with Union Pacific and Grupo México Transportes, CNI developed Falcon Premium to provide a seamless, all-rail service that connects Canada, the United States and Mexico. The service delivers truck-like reliability while reducing greenhouse gas emissions by up to 75%. This award reinforces Canadian National’s active role in driving innovation, improving supply-chain performance and promoting environmentally responsible logistics across North America.
CNI’s 2025 capital investment program demonstrates a strong commitment to modernizing North America’s rail infrastructure and supporting long-term sustainable growth. With a planned $85 million investment in Michigan alone, Canadian National is targeting key upgrades in cities like Lansing, Battle Creek and Flint to enhance rail yard operations and intermodal capacity. Across the United States, CNI is investing approximately $295 million in states, including Illinois ($170M), Mississippi ($75M), Tennessee ($30M) and Indiana ($20M), focusing on track maintenance, technology, capacity building and network resiliency. These strategic investments follow significant prior-year spending, such as $77 million in Minnesota in 2024, reinforcing the company’s ongoing efforts to build a safer, more efficient and environmentally responsible rail network.
CNI’s consistent efforts to reward its shareholders via dividends and buybacks are encouraging and highlight the company's financial strength. In 2022, CNI paid dividends of C$2.00 billion and repurchased shares worth C$4.71 billion. In 2023, CNI paid dividends of C$2.07 billion and repurchased shares worth C$4.55 billion. During 2024, CNI paid dividends of C$2.14 billion and repurchased shares worth C$2.60 billion. During the first quarter of 2025, CNI paid dividends of C$557 million and repurchased shares worth C$151 million.
CNI: Key Risks to Watch
Canadian National Railway is facing mounting financial pressure as rising expenses and weak liquidity continue to strain its performance. The company's operating costs have consistently remained high, climbing from $10.27 billion in 2022 to $10.8 billion in 2024, a clear upward trend that continued into the first quarter of 2025 with a 3.3% year-over-year increase.
These escalating expenses strain profitability and operational efficiency, especially in an industry where cost control is critical to maintaining margins.
Compounding this issue is CNI’s weak liquidity position. The company’s current ratio (a measure of liquidity) has remained below 1.0 for several years, indicating it does not have sufficient short-term assets to cover its short-term liabilities. The ratio dropped from 0.84 in 2022 to 0.61 in 2023, and although it slightly improved to 0.66 in 2024, it declined again to 0.62 in the first quarter of 2025. This sustained low liquidity heightens financial risk, potentially limiting CNI’s flexibility to manage unexpected costs or invest in growth opportunities.
Together, rising costs and weak liquidity present significant headwinds that the company must address to restore investor confidence and maintain long-term financial stability. Owing to such tailwinds, the company’s shares have declined 11.4% year over year compared to the Transportation - Rail industry’s 1% growth.
Image Source: Zacks Investment Research
CNI’s Zacks Rank
CNI currently carries a Zacks Rank of #3 (Hold).
Stocks to Consider
Investors interested in the Transportation sector may consider SkyWest (SKYW - Free Report) and Air Lease (AL - Free Report) .
SKYW currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks (Strong Buy) here.
SKYW has an expected earnings growth rate of 19.4% for the current year. The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 17.1%. Shares of SKYW have risen 26.5% year over year.
AL currently carries a Zacks Rank of 2.
AL has an expected earnings growth rate of 9.6% for the current year. The company has a mixed earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 5.2%. Shares of AL have rallied 25.8% year over year.