Canadian National Railway vs Canadian Pacific Railway Which Performs Better?

When comparing Canadian National Railway (CNR) and Canadian Pacific Railway (CP) stocks, investors must consider key factors such as market share, revenue growth, and operational efficiency. Both companies are major players in Canada's transportation industry, with CNR focusing on freight services and CP specializing in transporting bulk commodities. While CNR has a larger market capitalization and network, CP has demonstrated stronger financial performance in recent years. Evaluating these stocks requires a thorough analysis of industry trends and company fundamentals.

Canadian National Railway or Canadian Pacific Railway?

When comparing Canadian National Railway and Canadian Pacific Railway, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Canadian National Railway and Canadian Pacific Railway.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Canadian National Railway has a dividend yield of 1.98%, while Canadian Pacific Railway has a dividend yield of 0.73%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Canadian National Railway reports a 5-year dividend growth of 10.82% year and a payout ratio of 36.38%. On the other hand, Canadian Pacific Railway reports a 5-year dividend growth of -21.46% year and a payout ratio of 20.03%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Canadian National Railway P/E ratio at 16.97 and Canadian Pacific Railway's P/E ratio at 20.40. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Canadian National Railway P/B ratio is 5.09 while Canadian Pacific Railway's P/B ratio is 1.64.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Canadian National Railway has seen a 5-year revenue growth of 0.31%, while Canadian Pacific Railway's is 0.32%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Canadian National Railway's ROE at 26.94% and Canadian Pacific Railway's ROE at 8.22%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $111.49 for Canadian National Railway and $77.29 for Canadian Pacific Railway. Over the past year, Canadian National Railway's prices ranged from $107.54 to $134.02, with a yearly change of 24.62%. Canadian Pacific Railway's prices fluctuated between $69.08 and $91.58, with a yearly change of 32.57%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.