CN Rail Hikes Dividend After a Solid Year in 2022

A good way to invest in the economy is to buy shares of railway businesses and logistics companies that help move goods across the country. Canadian National Railway Company (TSX:CNR)(NYSE:CNI) is a great example of that as it has 20,000 miles of track in North America that helps connect cities across Canada and the U.S.

The business does look to be doing well as CN Rail recently announced its fourth-quarter results where adjusted diluted per-share earnings of $2.10 rose 23% year over year. Revenue of $4.5 billion in Q4 was up 21% and the top line rose 18% for the full year. CN Rail has more modest expectations for the current year, however, projecting that its per-share earnings will only rise by the low single digits, "due to a softer economic outlook."

But the results have been encouraging enough for CN to announce an increase to its dividend. The company said that its Board of Directors approved an 8% increase to the payout, which will mark the 27th straight year that the company has increased its dividend payments. The quarterly payment will now be $0.79, up from its previous payment of $0.7325. At the new rate, the stock will be yielding 2% per year. That's higher than rival Canadian Pacific Railway Limited (TSX:CP)(NYSE:CP), which yields just 0.7%.


In the past year, shares of CN Rail are up a modest 2%. But when looking at a wider time frame of 10 years, its gains are more much convincing, with shares of the railroad operator up 230%. For long-term investors, CN Rail is a top stock to own as it can provide stability and a great yield.