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Canadian National Railway Company (CNR)
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Canadian Pacific Kansas City Limited (CP)
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Toromont Industries Ltd. (TIH)
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TFI International Inc. (TFII)
Q: From reading your recent answers, you like these 4 companies (CNR, CP, TFII and TIH). Would you please rank these 4 companies for growth and rank them again for dividend growth. Which two companies would be your favorite for a combination of growth and dividends for a 5+ year hold? If you can give a brief explanation for the reason(s) over the other 2 companies? Thank you.
5i Research Answer:
We like all the names mentioned, and we think these are high-quality industrials companies with durable competitive advantage and would be okay owning them all. Each has unique profile of capital appreciation, dividend growth and some downside protection. For investors who like exposure to dividends growth + some above-average upside potential, we would side with TIH and TFII on valuation, potential, acquisition potential and management.
However, for investors who prefer downside protection and okay total returns over the long-term (10%-12%), we would go with the rails CNR and CP, as these are highly durable assets with staying power.