End of strike cuts CN’s risk

Article Excerpt

CANADIAN NATIONAL RAILWAY CO. $148 is a buy. The company (Toronto symbol CNR; Conservative Growth Portfolio, Manufacturing & Industry sector; Shares outstanding: 691.2 million; Market cap: $102.3 billion; Price-to-sales ratio: 7.0; Dividend yield: 2.0%; TSINetwork Rating: Above Average; www.cn.ca) operates Canada’s largest railway. Its 32,200-kilometre network stretches across the country and passes through the U.S. Midwest to the Gulf of Mexico. The union representing about 750 of CN’s signal and communications workers (3% of its total workforce) have ended their three-week strike. Both sides will now settle the dispute through a binding arbitration process. The final deal will undoubtedly increase CN’s operating costs. However, labour peace helps cut the company’s risk. Moreover, CN’s strong focus on efficiency and rising freight volumes will help lift its earnings in 2022 by about 16% to $6.88 a share. The stock trades at a reasonable 21.5 times that estimate. The $2.93 dividend yields a solid 2.0%. CN Rail is a buy. buy…

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