Dividend Investors: Don’t Be Deterred by Low Yield | The Motley Fool Canada: "Canadian National Railway
Canadian National Railway Canadian National Railway Company (TSX:CNR)(NYSE:CNI) is the perfect example of a top dividend-growth stock that offers a modest yield.
The company generates a ton of free cash flow and allocates a significant portion of it to share repurchases as well as dividend payments. In fact, free cash flow for the first nine months of 2015 was $1.741 billion. The railway paid out $750 million in dividends and spent $1.250 billion to repurchase 16.2 million shares.
Canadian National Railway increased its quarterly dividend by 25% earlier this year to $0.3125 per share. Five years ago, the dividend was just $0.135 per share. With that kind of growth you would think the yield would be high, but the dividend return is still only 1.6%.
Investors are certainly not complaining. Anyone who bought Canadian National Railway five years ago has watched the investment increase by 135%."
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