The Canadian transportation sector moves the country’s economy, making billions of dollars each year from offering essential services. Moving goods, people, and materials efficiently across vast distances will remain a lucrative business for a very long time, and long-term-oriented investors could generate wealth by buying stocks of companies with solid fundamentals and significant growth prospects.
With $5,000 to invest for 2025, here are five Canadian transportation stocks to consider holding for long-term capital gains.
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Canadian National Railway (CN)
Canadian National Railway (TSX:CNR), or CN, is one of the largest railway operators in North America and a transportation stock worth holding in a core portfolio. The $95 billion railroad stock’s extensive rail network remains a cost-effective and environmentally friendly way to move goods, positioning CN as a critical player in expanding e-commerce-supported supply chains.
In 2024, CN stock returned to revenue growth fueled by increased intermodal and bulk shipments. Its operating ratio—a key efficiency metric for railroads—remains one of the best in the industry. With ongoing investments in infrastructure and technology, CN is well-positioned to capture additional market share.
High dividend-growth rates make CN stock’s 2.3% yielding payout an attractive long-term income play. Moreover, the Dividend Aristocrat’s historical price-to-earnings (P/E) ratio of 18.3, which remains below an industry average of 20.8, makes it appear cheap, although the company earns above-average double-digit returns on equity.
Waste Connections
Waste Connections (TSX:WCN) stock might not fit the traditional definition of a transportation stock, but its role in hauling and managing waste makes it a vital part of the sector. Operating across Canada and the U.S., Waste Connections focuses on non-hazardous waste collection, recycling, and landfill operations — a profitable business that propelled WCN stock to generate 107% in total returns over the past five years.
The company’s resilient business model is supported by long-term contracts and consistent demand for waste management services.
Waste Connections stock’s history of accretive strategic acquisitions helps it expand its footprint, grow earnings and richly reward WCN stock investors. Despite a double-digit earnings growth outlook, Waste Connections stock’s forward P/E of 47.8 remains currently below an industry average P/E of 50.1.
TFI International
TFI International (TSX:TFII) is a leader in the Canadian trucking and logistics industry, serving customers across North America. TFI has consistently demonstrated an ability to adapt to market trends, leveraging technology to optimize routes and reduce costs while embarking on accretive acquisitions that propelled TFI stock to generate 380% returns over the past five years.
The company continues to grow free cash flow as revenues and earnings rise, driven by its disciplined approach to acquisitions and cost management. With e-commerce continuing to drive demand for delivery services, the company should benefit from ongoing growth in the North American logistics sector.
TFI stock appears affordably priced with a PE of 25, which is less than half an industry average of 56.
Canadian Pacific Kansas City
Canadian Pacific Kansas City’s (TSX:CP) rail network connects Canada, the U.S., and Mexico. This unique positioning allows CPKC to capitalize on international trade flows across North America, particularly with the growing importance of nearshoring.
CP stock is in strong growth mode as revenue increased 28.5% year over year during the past 12 months. The $107 billion railroad stock’s combined network has delivered synergies, boosting revenue and operational efficiency. If North American cross-border trade continues to grow (beyond tariff threats), CPKC should see increased demand for its rail transportation services.
The company’s strong cash flow generation capacity supports dividend growth and infrastructure investments, making it a compelling choice for long-term investors. Shares have generated 95% in total returns over the past five years.
Westshore Terminals
Westshore Terminals (TSX:WTE) operates one of the largest coal export terminals in North America. While coal exports may seem like a declining industry, demand for metallurgical coal—used in steelmaking—may remain robust, particularly in Asia. The United States’s withdrawal from a key climate pact may extend coal usage for longer, offering further support to Westshore stock’s fast-growing dividend, which currently yields 6.3% annually.
Westshore’s efficient operations and strong export relationships have allowed it to maintain profitability, and its strategic location on the West Coast provides a long-term competitive advantage, enabling it to handle high volumes of Canadian exports.
