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CNI, Canadian National Railway Company
A freight railroad, hauling goods across a heavy fixed-cost network it alone owns.
The business
What it sells, where the money comes from, the kind of company it is.
The business in brief
read the 10-K →What this business is and what moves its needle, from its own SEC filings.
- What moves the needle
- Volume and pricing against the operating ratio. What decides it: carloads, which track the economy; pricing power on a network rivals cannot replicate; and how much of each revenue dollar the network consumes. On its own account, the filing leans hardest on pricing power & competition, set against the numbers in what the filing emphasizes, below.
Every line is arithmetic on the company's filings, shown in full in the sections below.
The record
Ten years of arithmetic, read across the cycle.
Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.
In its latest reported year the business earned C$5.1B of owner earnings, the operating cash left after the C$1.9B it takes just to hold its position. It put C$1.7B more into growth; free cash flow, after that spending, was C$3.4B.
| FY | |
|---|---|
| Reported net income | C$4.7B |
| Depreciation & amortizationnon-cash charge added back | +C$1.9B |
| Working capital & othertiming of cash in and out, other non-cash items | +C$391M |
| Cash from operations | C$7.0B |
| Maintenance capital expenditurethe spending needed just to hold position and volume | −C$1.9B |
| Owner earnings | C$5.1B |
| Growth capital expenditurediscretionary; spent to get bigger, not to stand still | −C$1.7B |
| Free cash flow | C$3.4B |
| Owner-earnings marginowner earnings ÷ revenue | 30% |
Owner earnings is the cash an owner could pull out without starving the business: operating cash less the maintenance capital it must spend to hold its position (here about C$1.9B, roughly its depreciation, the rate its assets wear out). The other C$1.7B of its capital spending is growth it chose, not upkeep it owed; charged only with the maintenance it must do, the business earns well more than the year's free cash flow shows.
Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.
Quality & stewardship
Returns, the balance sheet, capital allocation, and pay.
Owner’s Scorecard
Will it survive?
- Can it pay its interest? 11.9×ComfortableOperating income C$6.6B ÷ interest expense C$554M
What this means
Operating profit covers interest with the kind of margin Graham wanted for a defensive holding. Necessary, not sufficient, it says solvent, not cheap.
- How heavy is the debt, net of cash? C$20.9B · 3.2× operating profitMeaningful net debtCash C$350M − debt C$21.2B
What this means
Netting C$350M of cash and short-term investments against C$21.2B of debt leaves C$20.9B owed, about 3.2× a year's operating profit. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
- Not enough data
What this means
The filing data didn't include the inputs for this check.
Is it a good business?
- SolidNOPAT C$5.0B ÷ invested capital C$42.4B (debt + equity − cash)Industry peers: median 13%
What this means
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; a return below the cost of capital (~8%) erodes value as a business grows rather than building it — the test Buffett weighs most. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- HighOwner earnings C$5.1B = operating cash C$7.0B − maintenance capex C$1.9BIndustry peers: median 25%
What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's 30% of revenue this year. It chose to put C$1.7B more into growth, so free cash flow this year was C$3.4B — the gap is investment, not weakness.
- Cash-backedCash from ops C$7.0B ÷ net income C$4.7B
What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns about halfDividends + buybacks C$2.2B ÷ Owner Earnings C$5.1B
What this means
Of C$5.1B Owner Earnings, C$2.2B (43%) went back to shareholders, C$2.2B dividends, C$0 buybacks. Returning most of it is the mark of a mature business with little left to reinvest at a high return; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 1.89×ExpandingCapex C$3.7B ÷ depreciation C$1.9B
What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Graham’s defensive tests · 0 of 2 met
Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.
- Adequate size —Revenue ≥ $2B (a dollar floor) · C$17.3B
What this means
Big enough to weather a storm. Graham's floor is a dollar figure — about $2B of revenue as a conservative modern stand-in. This company reports in its home currency and we carry no exchange rate, so we show the figure and leave the size bar for you to apply rather than convert it with a number we don't have.
- Strong liquidity MissCurrent ratio ≥ 2× · 0.67×
What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · C$21.2B vs (C$1.2B) WC
What this means
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are C$7.68/share, and book value is C$35.10/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Does AI threaten the moat?
Low contestabilityThe moat is physical, regulated or balance-sheet-funded, the kind AI cuts costs within but does not contest.
AI is unlikely to contest a moat that is physical, regulated or balance-sheet-funded; here it reads more as a cost tool than a threat.
Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.
All figures as filed; the source filing is linked above.
Current Position
as of fiscal year-end, Dec 31, 2025Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.
- Cash & short-term investmentsC$350M
- ReceivablesC$1.1B
- Other current assetsC$1.0B
- Other current liabilitiesC$3.7B
From the company's latest filing.
Peers, Railroads
The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| UNPUnion Pacific Corporation | $24.5B | — | 39.6% | 16% | 29% |
| CNICanadian National Railway Company | C$17.3B | — | 38.1% | 12% | 30% |
| CSXCSX Corporation | $14.1B | — | 38.6% | 14% | 26% |
| NSCNorfolk Southern Corporation | $12.2B | — | 34.1% | 11% | 23% |
| FIPFTAI Infrastructure Inc. Common Stock | $503M | — | -26.0% | -3% | -47% |
| Group median | — | — | 38.1% | 12% | 26% |
The price
What a price has to assume.
What the price implies
reverse-DCFEnter the US price, in dollars: the NYSE/Nasdaq quote you hold. Canadian National Railway Company's US listing is the ordinary share itself; figures in this tool are translated at CAD 1 = $0.712 (2026-07-17, reference rate); the dollar quote then reconciles exactly. The record tables elsewhere on this page remain as filed, in CAD.
Type today's close and see the owner-earnings growth you'd have to believe to justify it, beside what Canadian National Railway Company has delivered.
—
9.0% = the 4.55% 10-year Treasury (Jul 15, 2026) + 4.45 points of equity premium. The rate you require is yours to set.
Enter a price above to run it.
A dated snapshot of the price you typed, the assumptions you set, and what the page showed for them. A snapshot is never edited after it is saved. Your notebook is yours alone — the commitment states what is stored and what we will never do.
Prefilled with the 10-year Treasury (4.55%, as of Jul 15, 2026). Edit it for today’s exact figure, or a AAA corporate yield.
Graham measured a stock against the bond you could own instead, the heart of his margin of safety. Enter a price above to weigh the owner-earnings yield against this bond.
Free cash flow $2.4B on 614M shares outstanding, per the 40-F cover, as of 2025-12-31; net debt $14.9B. The base is the latest year by default; Normalize values it on the through-cycle median owner-earnings margin (to avoid paying on a peak year). Net of stock comp treats option pay as the expense it is. Capex ($2.6B) runs well above depreciation ($1.4B), so this is a build-out; Steady-state swaps total capex for maintenance (≈ depreciation), lifting the base to about $3.6B, the cash it would throw off if it stopped expanding. The dials set the multiple a growth belief justifies; the price, and every dollar on this page, is yours.
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