Canadian National Railway Company (CNI): A Bull Case Theory

We came across a bullish thesis on Canadian National Railway Company on Compounding Dividends’s Substack by TJ Terwilliger. In this article, we will summarize the bulls’ thesis on CNI. Canadian National Railway Company's share was trading at $97.36 as of January 13th. CNI’s trailing and forward P/E were 18.36 and 16.56 respectively according to Yahoo Finance.

Canadian National Railway Company, together with its subsidiaries, engages in the rail, intermodal, trucking, and related transportation businesses in Canada and the United States. CN Rail is the only railroad in North America connecting the Atlantic, Pacific, and Gulf coasts, giving it a unique and unparalleled network position.

This strategic footprint acts as a virtual toll booth on the North American economy, with minimal competition for long-haul freight, creating a formidable moat that is effectively impossible to replicate. The company’s operational efficiency is another key differentiator, as CN consistently ranks among the most efficient railroads globally, generating substantial free cash flow.

This robust cash generation underpins a steadily growing dividend, reinforcing its appeal to income-focused investors. After a period of elevated valuation, CN’s stock has become increasingly attractive relative to both its peers and its own historical averages, suggesting potential upside as the market recognizes the company’s rare combination of scale, efficiency, and pricing power. The investment case is further strengthened by the structural advantages of the business: the impossibility of building competing rail infrastructure and CN’s dominant role in North American freight transport.

These factors provide a durable long-term growth trajectory while minimizing competitive risk. Even in a base-case scenario, CN’s strong free cash flow and dividend growth offer compelling returns, while its unique network and pricing power create the potential for outsized upside if macroeconomic tailwinds and freight volumes remain favorable. Overall, CN represents a rare opportunity to invest in a high-quality, capital-efficient, and strategically essential infrastructure company with multiple levers for shareholder value creation.

Previously we covered a bullish thesis on Canadian National Railway Company (CNI) by Max Dividends in May 2025, which highlighted the company’s wide-moat business, essential role in North American freight, and 29 consecutive years of dividend increases. The stock price has been flat since our coverage. TJ Terwilliger shares a similar view but emphasizes CNI’s unmatched network, efficiency, and near-impossible-to-replicate moat.

Canadian National Railway Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 34 hedge fund portfolios held CNI at the end of the third quarter which was 43 in the previous quarter. While we acknowledge the risk and potential of CNI as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than CNI and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.