Lower costs help these railways adapt

Article Excerpt

U.S. President Donald Trump’s plan to renegotiate the North America Free Trade Agreement (NAFTA), along with the possibility of new tariffs, could hurt cross-border traffic for Canada’s two main railways. However, it seems Trump is mainly concerned about U.S. trade with Mexico rather than Canada. We’ll continue to monitor the NAFTA situation. Meanwhile, both CN and CP’s focus on improving their efficiency put them in a strong position to keep expanding their earnings. CANADIAN NATIONAL RAILWAY CO. $91 (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 764.0 million; Market cap: $69.5 billion; Price-to-sales ratio: 5.8; Dividend yield: 1.8%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,200-kilometre network stretches across the country, and reaches the U.S. Midwest and Gulf Coast. In the fourth quarter, ended December 31, 2016, CN’s overall freight volumes rose 3.3% from a year earlier. Higher shipments of metal and minerals, grain and fertilizers, and automotive products offset declines in coal, crude oil, forestry…