It's pretty well known that PRR took an operating loss in 1946 and still paid a dividend, probably financed by dividends on its 33% interest in N&W. PRR's management and operating practices were also incredibly conservative and this didn't help the financial situation.
At least it's not Pennsylvania Rairoad stock. The Standard Railroad of the world. Always paid a dividend until it didn't. Back in the late fifties, when I was a co-op student with them, I said things are bad, they can't get much worse. I was SO WRONG. I suspect that CN will be in good shape for the near term. They have good cash flow and can cover the capitol costs for the capacity improvements they need. How long the traffic will be there is the question. In fact, most Class 1's are in good shape. Except CSX which seems to have become confused as to how to satisfy its customers. NS has had a loss of coal traffic but otherwise looks like it knows what it needs to do. BNSF is completeing its double tracking of the transcon. And while it did add capacity to the Baken Oil area, it did not overbuild. UP has restrained itself on double tracking the Sunset route and is not facing any gridlock. I think most RR's still remember the PRR and don't want to overbuild and get stuck with overcapacity.
tree68 Ulrich Just so long as the dividends keep rolling in and the stock appreciates in value for the vast majority of us who have no employer pension plan. And this would be the worry about vulture investors who want to run up the stock value then cash out, leaving others to worry about the ruins that follow. For that matter, many folks do have an retirement plan that relies on that slow and steady growth, albeit usually in a variety of investments.
Ulrich Just so long as the dividends keep rolling in and the stock appreciates in value for the vast majority of us who have no employer pension plan.
And this would be the worry about vulture investors who want to run up the stock value then cash out, leaving others to worry about the ruins that follow.
For that matter, many folks do have an retirement plan that relies on that slow and steady growth, albeit usually in a variety of investments.
My wife and I like watching CNBC's Nightly Business Report on PBS stations. It seems almost weekly, if not more frequently, they report about a company under pressure from "activist investors."
Jeff
I wrote the book on buy and hold.. have owned CN since the IPO in 1995 and have never sold a share. so far so good. In fact.. have never sold a share of anything.. Will have to in another 20 years or so though..
UlrichJust so long as the dividends keep rolling in and the stock appreciates in value for the vast majority of us who have no employer pension plan.
Larry Resident Microferroequinologist (at least at my house) Everyone goes home; Safety begins with you My Opinion. Standard Disclaimers Apply. No Expiration Date Come ride the rails with me! There's one thing about humility - the moment you think you've got it, you've lost it...
Just so long as the dividends keep rolling in and the stock appreciates in value for the vast majority of us who have no employer pension plan.
Accounting rules will drive up operating ratios at CN and CP, but they'll still lead Class I railroads in the metric
http://trn.trains.com/news/news-wire/2018/01/09-operating-ratio-changes-eh
Brian Schmidt, Editor, Classic Trains magazine
Our community is FREE to join. To participate you must either login or register for an account.