Canadian National Railway Company (TSX:CNR)(NYSE:CNI), the largest railway operator in Canada, has watched its stock post a very disappointing performance in 2015, falling more than 8.5% as the TSX Composite Index has fallen about 1.5%. However, one positive event, like an earnings beat, could propel its shares higher and put it in positive territory for the year. With this in mind, the company is scheduled to release second-quarter earnings results after the market closes on July 20, so let’s take a look at five of the most important factors it will need to satisfy if its shares are going to react positively.

1. EPS and revenue results versus analysts’ expectations

It will be of the utmost importance for Canadian National Railway to meet or exceed analysts’ earnings per share and revenue expectations. Here are the current consensus estimates for the quarter and its actual results in the same period a year ago.

Metric Q2 2015 Expected Q2 2014 Actual
Earnings Per Share $1.06 $1.03
Revenue $3.14 billion $3.12 billion

Source: Financial Times 

The estimates above call for Canadian National Railway’s earnings per share to increase 2.9% and its revenue to increase 0.6% compared with the second quarter of fiscal 2014, which seems very attainable given the 30.3% year-over-year earnings growth and 15% year-over-year revenue growth achieved in the first quarter of fiscal 2015.

2. Improvement of the operating ratio

Keep an eye on Canadian National Railway’s operating ratio and make sure it continues to show improvement. The operating ratio is a statistic that shows the efficiency of a company’s financial management by comparing its operating expenses to its net sales, and simply stated, the lower the operating ratio, the greater the company’s ability to generate profits if its revenue were to decline.

In the first quarter of fiscal 2015 the company’s operating ratio improved 390 basis points to 65.7%, and it reported a ratio of 59.6% in the second quarter of fiscal 2014, so it would be ideal if it were to get its ratio below 59% in the second quarter of fiscal 2015.

3. Free cash flow growth

Watch for the amount of free cash flow generated by Canadian National Railway in the second quarter, and make sure it shows growth from the year-ago period. The company generated $521 million of free cash flow in the first quarter of fiscal 2015, an increase of 5.5% year over year, and $776 million in the second quarter of fiscal 2014, an increase of 21.8% year over year, so it would be ideal for it to achieve free cash flow of $800 million or more in the second quarter of fiscal 2015.

4. Affirmation of its full-year outlook

Make sure Canadian National Railway reaffirms its full-year outlook on fiscal 2015, which calls for double-digit percentage growth compared with fiscal 2014’s adjusted diluted earnings per share of $3.76.

5. Declaration of its third-quarter dividend

Watch for Canadian National Railway to announce that it will be maintaining its quarterly dividend of $0.3125 per share in the third quarter. The company has raised its annual dividend payment every year since it first began paying dividends in 1996, and if it maintains its current quarterly rate for all of 2015, its streak will reach 19 consecutive years of increases.

Is now the time to buy Canadian National Railway Company?

I think Canadian National Railway’s stock it well positioned to rally following the release of its second-quarter earnings results on July 20. I also think its stock represents one of the best long-term investment opportunities in the market today because it trades at just 17.7 times fiscal 2015’s estimated earnings per share of $4.12 and only 15.8 times fiscal 2016’s estimated earnings per share of $4.63, both of which are inexpensive compared with the industry average price-to-earnings multiple of 20.9.

With all of the information provided above in mind, I think all Foolish investors should strongly consider making Canadian National Railway a core holding today.

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Fool contributor Joseph Solitro has no position in any stocks mentioned. David Gardner owns shares of Canadian National Railway. The Motley Fool owns shares of Canadian National Railway. Canadian National Railway is a recommendation of Stock Advisor Canada.