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Summary
- Melinda now owns a two per cent stake in the company which amounts to C$ 1.8 billion, based on the closing price of C$ 134.95.
- Bill Gates will continue to hold a 12.3 per cent stake in CNR.
- The company revealed in its first-quarter earnings report that its traffic volume increased five per cent year-over-year (YoY).
Bill Gates, the founder of Microsoft Corporation transferred over 14 million shares of Canadian National Railway Company (TSX:CNR) to his wife Melinda Gates, making her the sixth biggest shareholder of the company. The high-power philanthropic couple are heading for a divorce.
Ms Melinda now owns a two per cent stake in the company, which amounts to C$ 1.8 billion, based on the closing price of C$ 134.95 apiece on Wednesday, May 5. Despite the share transfer, Mr Gates will continue to hold a 12.3 per cent stake in CNR.
After this news broke out, CNR stocks climbed up by about one per cent. The railway company is in a bidding war with rival Canadian Pacific Railway (TSX:CP) to buy Kansas City Southern in the US. If CNR wins this bidding war, it will expand its railroad network and will enable it to operate in Canada, Mexico and the US.
If you're looking to diversify your portfolio, let's take a look at the Canadian National Railway Company (TSX:CNR) recent stock and financial performances to find out whether it is a buy stock or not.
Canadian National Railway Company (TSX:CNR)
On average, over 1.3 million CNR shares were traded in the past 90 days and the stock grew by two per cent in three months. Its one-year growth stands at about 15 per cent as it outperformed the S&P TSX Railroads (Sub Industry) Index which went down by eight per cent.
One-year chart of stock performance of CNR (Source: EODHD/Others/Thomson Reuters)
As per TMX, the railway company's market cap is C$ 95.8 billion and its debt-to-equity (D/E) ratio is 0.66. It also offers a 19.22 per cent return on equity (ROE) and 8.16 per cent return on assets.
With a current dividend yield of 1.823 per cent, the CNR distributes a quarterly dividend of C$ 0.615. In the past five years, the dividend growth was at the rate of 11.5 per cent and 10.4 per cent in three years.
A Look At CNR’s Financials
On April 26, while releasing its first-quarter earnings report, the company revealed that its traffic volume increased five per cent year-over-year (YoY). It also updated its earnings estimate for the year and said it is set to achieve an adjusted diluted earnings growth in double digits for the year.
In Q1 2021, the operating income was C$ 1,327 million, up by nine per cent from the same quarter of last year. In line with the prior year, the company achieved revenue of C$ 3.5 billion. The net income, however, reduced to C$ 974 million from C$ 1,011 million in Q1 2020.
From C$ 3.1 billion in Q4 2020, the worth of the total current assets increased to C$ 3.4 billion in Q1 2021.
The above constitutes a preliminary view and any interest in stocks should be evaluated further from an investment point of view.
