Canadian National Railway Co (Canadian National Railway Co) Graham Number

: $53.53 (As of Dec. 2023)

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Graham Number is a figure that measures a stock's fundamental value by taking into account the company's earnings per share and book value per share. The Graham number is the upper bound of the price range that a defensive investor should pay for the stock. According to the theory, any stock price below the Graham number is considered undervalued, and thus worth investing in.

As of today (2024-04-23), the stock price of Canadian National Railway Co is $129.32. Canadian National Railway Co's graham number for the quarter that ended in Dec. 2023 was $53.53. Therefore, Canadian National Railway Co's Price to Graham Number ratio for today is 2.42.

The historical rank and industry rank for Canadian National Railway Co's Graham Number or its related term are showing as below:

CNI' s Price-to-Graham-Number Range Over the Past 10 Years
Min: 1.78 Med: 2.11 Max: 2.49
Current: 2.49

During the past 13 years, the highest Price to Graham Number ratio of Canadian National Railway Co was 2.49. The lowest was 1.78. And the median was 2.11.

CNI's Price-to-Graham-Number is ranked worse than
85.79% of 732 companies
in the Transportation industry
Industry Median: 0.97 vs CNI: 2.49

Graham Number is a combination of asset valuation and earnings power valuation. It is a very conservative way of valuing a stock.

Canadian National Railway Co Graham Number Historical Data

The historical data trend for Canadian National Railway Co's Graham Number can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Canadian National Railway Co Annual Data

Trend

Dec14

Dec15

Dec16

Dec17

Dec18

Dec19

Dec20

Dec21

Dec22

Dec23

Graham Number

43.32

44.51

51.25

53.57

53.10

Canadian National Railway Co Quarterly Data
	Mar19	Jun19	Sep19	Dec19	Mar20	Jun20	Sep20	Dec20	Mar21	Jun21	Sep21	Dec21	Mar22	Jun22	Sep22	Dec22	Mar23	Jun23	Sep23	Dec23
Graham Number																55.15	55.61	55.13	52.73	53.53

Competitive Comparison

For the Railroads subindustry, Canadian National Railway Co's Price-to-Graham-Number, along with its competitors' market caps and Price-to-Graham-Number data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Canadian National Railway Co Price-to-Graham-Number Distribution

For the Transportation industry and Industrials sector, Canadian National Railway Co's Price-to-Graham-Number distribution charts can be found below:

* The bar in red indicates where Canadian National Railway Co's Price-to-Graham-Number falls into.

Canadian National Railway Co Graham Number Calculation

Graham Number is a concept based on Ben Graham's conservative valuation of companies.

Canadian National Railway Co's Graham Number for the fiscal year that ended in Dec. 2023 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI)
=	sqrt of (22.5	*	23.097	*	5.426)
=	53.10

Canadian National Railway Co's Graham Number for the quarter that ended in Dec. 2023 is calculated as

	Graham Number
=	sqrt of (22.5	*	Tangible Book per Share	*	EPS without NRI (TTM))
=	sqrt of (22.5	*	23.097	*	5.514)
=	53.53

Canadian National Railway Co (NYSE:CNI) Graham Number Explanation

Ben Graham actually did not publish a formula like this. But he wrote in The Intelligent Investor (1948 version) regarding to the criteria for purchases:

Current price should not be more than 15 times average earnings of the past three years.

Current price should not be more than 1.5 times the book value last reported. However, a multiplier of earnings below 15 could justify a correspondingly higher multiplier of assets. As a rule of thumb we suggest that the product of the multiplier times the ratio of price to book value should not exceed 22.5. (This figure corresponds to 15 times earnings and 1.5 times book value. It would admit an issue selling at only 9 times earnings and 2.5 times asset value, etc.)

Unlike valuation methods such as DCF or Discounted Earnings, the Graham number does not take growth into the valuation. Unlike the valuation methods based on book value alone, it takes into account the earnings power. Therefore, the Graham Number is a combination of asset valuation and earnings power valuation.

In general, the Graham number is a very conservative way of valuing a stock. It cannot be applied to companies with negative book values.

Canadian National Railway Co's Price to Graham number Ratio for today is calculated as

Price to Graham number	=	Share Price (Today)	/	Graham number (Q: Dec. 2023 )
	=	129.32	/	53.53
	=	2.42

Be Aware

Please keep these in mind:

1. Graham Number does not take growth into account. Therefore it underestimates the values of the companies that have good earnings growth. We feel that if the earnings per share grows more than 10% a year, Graham Number underestimates the value.
2. Graham Number punishes the companies that have temporarily low earnings. Therefore, an average of earnings makes more sense in the calculation of Graham Number.
3. Graham Numbers underestimates companies that are light with book.

Canadian National Railway Co Graham Number Related Terms

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Canadian National Railway Co (Canadian National Railway Co) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Industrials » Transportation » Canadian National Railway Co (NYSE:CNI) » Definitions » Graham Number

Comparable Companies

Traded in Other Exchanges

CNI:Mexico CY2:Germany CY2:Germany CNR:Canada CNIC34:Brazil

Address

935 de La Gauchetiere Street West, Montreal, QC, CAN, H3B 2M9

Website

https://www.cn.ca

Canadian National's railway spans Canada from coast to coast and extends through Chicago to the Gulf of Mexico. In 2022, CN generated roughly CAD 17.1 billion in revenue by hauling intermodal containers (29% of consolidated revenue), petroleum and chemicals (19%), grain and fertilizers (16%), forest products (12%), metals and mining (11%), automotive shipments (5%), and coal (5%). Other items constitute the remaining revenue.