Should You Own CP and CNR

With the recent strike at CN Rail and it's rather quick settlement, it got me wondering if this is still a good investment and why I own them. 

I own both of these stocks in all our retirement accounts and have for years. For retirees they are low yielders at 1 and 1.8%.

Your not going to get rich or generate a lot of extra quarterly cash flow but you do get a lot of growth and stability.

Instead of buying any fixed income products for retirement, I consider these two stocks as my balance, diversification and asset allocation. They never really move too much in either direction but just slowly grind upwards.

If the latest work stoppage has taught us anything is that CNR is absolutely 100% essential to the Canadian economy. Why not own it?

All they do is make money year after year. If you buy individual stocks instead of index ETFs then these two rail stocks are a must own for any Canadian.

CNR

Market Cap: $87.6B
Beta: 0.93

ROE: 24.8%

Forward P/E: 19.8

EPS Growth: 5.4%

Revenue: $15B
Revenue Growth: 3.8% yoy

Debt: $14.3B
Free Cash Flow:$648M
Price : $122.49

52 week high: $127.96

CP

Market Cap: $43.5B
Beta: 1.2

ROE: 32.3%

Forward P/E: 19

EPS Growth: 16.5%

Revenue: $7.7B
Revenue Growth: 4.3% yoy

Debt: $9.3B
Free Cash Flow: 1.19B
Price: $317.29B

52 week high: $323.77

With fixed income and savings accounts yielding so little why not buy some big stable, low yielding, high growth, money making machines like these railroad stocks instead? To each his own but this is the route I took.

I consider them portfolio anchors in a retirement along with a bank, pipeline and a utility stock. You could do worse and they are a lot less volatile than a high yield monthly income stock.

If the Canadian economy simply can't run without the railways then they must be a great investment for individuals.

Do you own CP or CNR or both?

For more ideas on generating cash flow in retirement read my book review on Your Ever Growing Income here.