A stock that can beat global markets in 2026 usually has three things going for it at the same time. It has a business Canadians rely on, it has a clear reason results should improve over the next year, and it trades at a price that leaves room for upside. You also want something with real pricing power, as inflation and higher costs do not disappear just because the calendar flips. The best setups often look a bit boring on the surface, but the numbers quietly get better as the year goes on. Such as with this ultimate dividend stock.
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CNR
Canadian National Railway (TSX:CNR) looks built for that kind of year as it sits right in the middle of the real economy. It moves grain, energy products, consumer goods, autos, forest products, and intermodal containers across a network that links the Atlantic, the Pacific, and the Gulf of Mexico. When businesses ship more, it earns more. When they ship less, it still runs a critical network with the ability to protect margins through discipline and pricing.
It also matters that CNR sells a service, not a commodity. The dividend stock does not need oil to be at a specific price or natural gas to spike to make money. It needs freight volumes and reliable execution. In its latest quarter, management emphasized service and efficiency, and the operating ratio improved, which tells you the company did not just grow; it ran better.
The dividend stock’s recent performance has felt like a tug-of-war between soft economy worries and quality always wins reality. CNR currently holds a market cap around $86.5 billion and a recent earnings date set for January 30, 2026, which puts it back in the spotlight soon. It has not been a straight line, but railways rarely are.
Into earnings
So let’s look back at the hard numbers. In the third quarter of 2025, CNR reported revenue of $4.2 billion, up 1% year over year. It reported net income of $1.1 billion, up 5%, and diluted earnings per share (EPS) of $1.83, up 6%. The operating ratio came in at 61.4%, an improvement of 170 basis points. Overall, the dividend stock squeezed more profit out of each dollar of revenue.
Margin gains often show up before the market fully prices them in. CNR also maintained its 2025 guidance for mid-to-high single-digit adjusted diluted EPS growth, which suggests management still sees the fundamentals as stable, even with the usual noise. That gives investors a cleaner runway into 2026, especially if freight demand firms up and rate pressure eases.
The valuation looks reasonable for a high-quality compounder. The dividend stock currently trades at 18.8 times earnings, which hints that the market expects earnings to grow. It also shows a forward dividend of about $3.55 per share, which gives a modest yield of 2.6% at writing, so you buy it for compounding first and income second. If 2026 brings even a mild economic pickup, that forward multiple can look conservative in hindsight.
Bottom line
CNR looks set to outperform global markets in 2026, combining a wide economic moat with improving efficiency, and it does not need a perfect macro backdrop to deliver progress. The next catalyst is simple: investors get fresh numbers on January 30, 2026. They’ll need to see confirmation that steady volumes and strong margins can pull more money into quality Canadian names. Meanwhile, they can still earn some income from this dividend stock, even from $7,000.
| COMPANY | RECENT PRICE | NUMBER OF SHARES | DIVIDEND | ANNUAL TOTAL PAYOUT | FREQUENCY | TOTAL INVESTMENT |
|---|---|---|---|---|---|---|
| CNR | $138.65 | 50 | $3.55 | $177.50 | Quarterly | $6,932.50 |
The risks stay real, including a weaker economy, labour disruptions, or operational hiccups that hurt service. Still, if you want one TSX stock that can feel “Buy Canadian” in the best way, CNR has a believable path to doing better than the average global index while you hold it.
