When investors dream of building generational wealth, they often chase high-growth tech, meme stocks, or flashy sectors. But history shows that long-term wealth is more often built on companies with quiet resilience, not noisy hype. That’s why one of the most overlooked opportunities in Canada today could be sitting in plain sight: Canadian National Railway (TSX:CNR).
While the market has punished the stock in recent months, long-term investors should be paying close attention. Because this century-old freight giant might just be the ticket to financial security for generations to come.
From market headwinds to hidden value
Canadian National Railway hasn’t had an easy ride recently. Concerns about U.S. tariffs, reduced trade volumes, and operational disruptions — ranging from 2024’s wildfires to labour disputes — have dragged down performance. In 2024, revenue grew just 1.3%, while operating expenses spiked 16%, leading to an 18% drop in diluted earnings per share. The market noticed. Shares are now trading roughly 24% below their 2024 highs.
But this is where opportunity lies.
CNR is still the backbone of the North American economy, moving everything from grain and crude oil to lumber and manufactured goods. Its transcontinental network spanning the Atlantic to the Pacific and deep into the U.S. Gulf Coast positions it as a critical infrastructure player, not just a transportation company.
During downturns, railways like CN provide resilience. In expansions, they ride the tailwinds of trade and infrastructure growth. That’s the kind of stability that true wealth builders seek.
A compounding machine in disguise
What really makes CN Rail a generational wealth stock is its commitment to capital discipline and shareholder returns. It has been raising its dividend for nearly 30 consecutive years, earning its place as a Canadian Dividend Aristocrat. While its yield isn’t sky-high at almost 2.7%, the dividend growth rate tells the real story: a 10-year compound annual growth rate (CAGR) of 13% and a still-solid 6.5% CAGR over the last three years — even as earnings growth has slowed.
This reflects CN Rail’s deliberate strategy: reinvest profits into long-term value drivers like automation, network efficiency, and fuel optimization — while returning capital to shareholders through rising dividends and buybacks.
With one of the best operating ratios in the industry, CN maintains a rare balance: it grows, pays you to hold, and maintains operational efficiency.
A quiet giant that’s undervalued and underowned
Despite its strengths, CN Rail is largely ignored by retail investors — overshadowed by hotter names. It doesn’t make headlines. It doesn’t promise 10 times returns overnight. But what it does offer is something more durable: reliability, scalability, and resilience.
And today, it’s trading at a discount. At roughly 15% below its historical valuation norms, CN Rail looks undervalued for a company of its calibre. Add to that solid free cash flow, reasonable debt, and improving long-term earnings prospects, and you get a high-quality stock on sale.
For families thinking beyond the next quarter — and instead planning for the next generation — this is the kind of asset that could quietly grow into a cornerstone of lasting wealth.
Investor takeaway
Canadian National Railway isn’t just a good company — it’s a great legacy.
It may not be flashy. It may not go viral. But it’s built to endure. And for investors thinking in decades, not days, the blue-chip stock could be the foundation that jumpstarts your family’s generational wealth — slowly, steadily, and powerfully.
Because sometimes, the best investments are the ones no one is talking about.
