CN Rail (TSX: CNR) and TELUS (TSX: T) could be two of the most unfairly punished stocks on the TSX right now, and patient investors who buy at these levels could be setting themselves up for serious long-term gains.
CNR sits roughly 24% below its all-time high, and TELUS is nearly 49% off its peak. The market has been treating both like damaged goods. But dig into what management is actually saying, and a very different story emerges.
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CN Rail is running the best railroad in years
Speaking at the JPMorgan Industrials Conference on March 17, COO Pat Whitehead delivered a picture of a railroad firing on all cylinders.
- Car velocity is up nearly 10% so far this year versus 2025.
- Network train speed is up 6%.
- Terminal dwell, the time rail cars sit idle, is down 6%.
The company set a record for fuel efficiency in February 2026. CN is already the most fuel-efficient railroad in North America, and it keeps finding ways to improve.
However, CFO Ghislain Houle flagged $10 million to $20 million in extra snow-removal costs this quarter year-over-year. Currency is also working against the company, with the Canadian dollar trading around $0.73 to $0.74 versus $0.70 a year ago, representing a roughly $0.05-per-share earnings headwind.
And tariffs on forest products (45%) and metals (50%) have been painful, with management estimating tariff impacts of around $350 million in 2025.
CN now has 65% of its Western Canadian gateway double-tracked, up from 40% before 2025. That created seven new trains per day of additional capacity, without degrading network health.
The blue-chip Canadian giant is leaner, more productive, and more agile than it was a few years ago. The stock price does not reflect that yet.
TELUS stock offers a dividend yield of 9%
TELUS is a telecom behemoth that generated record free cash flow of $2.2 billion in 2025, up 11% from 2024. The company is guiding for approximately $2.5 billion in free cash flow in 2026, another roughly 10% jump.
The Canadian dividend stock is down nearly 49% from its all-time high, raising its yield to almost 9.3%.
TELUS posted 1.1 million combined mobile and fixed customer net additions in 2025, its fourth consecutive year surpassing one million. The telco posted industry-leading postpaid mobile phone churn of 0.97% for the full year, its 12th straight year below 1%.
Network revenue returned to positive growth in the fourth quarter of 2025. Wireless ARPU (average revenue per user) declined just 1.6%, its best sequential performance in years and the strongest improvement among Canadian peers.
Meanwhile, TELUS Health and TELUS Digital are both expected to deliver double-digit EBITDA (earnings before interest, tax, depreciation, and amortization) growth in 2026. AI-enabling capabilities revenue jumped 44% in the fourth quarter alone and 35% for the full year, putting the company on a path toward its $2 billion AI revenue target by 2028.
Net debt-to-EBITDA fell from 3.9 times at the end of 2024 to 3.4 times at the end of 2025. The company is targeting 3.3 times or lower by the end of 2026 and 3 times or better by the end of 2027.
The bottom line on CNR and TELUS stock
Neither of these companies is getting the credit it deserves right now. Macro noise, including tariffs, currency, rate sensitivity, and recession fears, has pushed both stocks well below where their fundamentals suggest they belong.
CN Rail is a leaner, faster, and more efficient railroad than it was two years ago, with ample capacity to absorb additional volume when freight demand recovers.
TELUS is generating record cash flow, leading the industry in customer loyalty, and building a credible AI business on the side.
Both stocks come with real risks. But for investors with a two- to three-year horizon, CNR and TELUS look like exactly the kind of beaten-down, high-quality businesses that go on to deliver outsized returns. The market may be writing them off. That might be the opportunity.
