Some TSX stocks are just built to last. They might not grab headlines with wild short-term moves, but they form the backbone of a strong long-term portfolio. Canadian National Railway (TSX:CNR) is one of those rare businesses. And with shares down about 17% from their 52-week high, long-term investors might want to take a closer look. This is one of Canada’s most magnificent stocks, and now could be a smart time to buy and hold it forever.
About CNR
CNR isn’t just another transportation company. It operates the only transcontinental railway in North America, spanning from the Atlantic to the Pacific and reaching deep into the U.S. With more than 32,000 kilometres of track and over 20,000 employees, it plays a critical role in moving goods across the continent. Whether it’s grain, oil, lumber, cars, or containers, chances are CNR had a hand in getting it from point A to point B.
But even the strongest TSX stocks can face headwinds. In its first-quarter 2025 results, CNR reported revenue of $4.25 billion, down 2% from the same period in 2024. Net income came in at $1.15 billion, or $1.82 per diluted share, which also marked a slight year-over-year decline. That’s what led to some recent softness in the stock price. However, context is key here. This performance came despite winter weather disruptions and slower economic activity in key sectors like intermodal and grain.
The decline isn’t something to ignore, but it’s also not a sign of weakness in the core business. In fact, CNR improved its operating ratio to 61.1% from 67.3% in Q1 2024. That means it’s getting more efficient, spending less to generate revenue. And while volumes were lower, pricing remained firm, and management reaffirmed its full-year guidance. In other words, this isn’t a TSX stock in trouble. It’s a well-run machine dealing with temporary slowdowns.
More to come
The dividend is another highlight. CNR pays an annual dividend of $3.55 per share, which works out to a yield of about 2.5% at recent prices. That might not seem high, but it’s backed by a payout ratio around 40% and a history of dividend growth. The TSX stock has raised its dividend every year for over 25 years, making it a reliable income source for patient investors. Inside a Tax-Free Savings Account (TFSA), those dividends become even more valuable over time.
CNR also continues to invest in its future. It’s planning $3.5 billion in capital expenditures this year, focused on infrastructure, technology, and locomotives. These investments help improve safety, efficiency, and capacity. With demand for rail expected to rise alongside population growth and trade, CNR is making sure it’s ready for the next generation of shipping.
There are some risks to consider. If the economy slows further, rail volumes could stay soft. Labour negotiations and fuel costs are other factors to watch. And with more environmental regulations coming, CNR will need to continue modernizing its fleet. But the TSX stock is already working on cleaner locomotives and more efficient networks. It’s not resting on its legacy; it’s adapting.
Bottom line
At current levels, CNR is trading at a reasonable valuation for such a high-quality business. It has wide economic moats, consistent profitability, and a shareholder-friendly approach. While other TSX stocks may offer more excitement or higher yields, few offer the same combination of durability, growth, and dependability.
So yes, CNR is down from its highs. But that pullback could be a gift for long-term investors. This is the kind of stock you can buy, tuck away, and let compound over decades. It won’t deliver overnight riches, but it could help build wealth the steady way. And in a market full of noise, that kind of quiet strength is exactly what many portfolios need.
