A Dirt-Cheap Canadian Dividend Growth Stock Built for the Long Haul

There’s no shortage of great long-term stocks on the market. These stocks provide decades of uninterrupted growth and dividends to make them the perfect buy-and-forget candidate. Among those picks is one Canadian dividend growth stock that investors should be looking at right now.

That Canadian dividend growth stock is Canadian National Railway (TSX:CNR), and here’s why it belongs in your portfolio for the long term.

Meet Canadian National Railway

Canadian National Railway is one of those rare Canadian dividend growth stock picks that investors can buy, hold, and forget about for a decade or more. The company sits at the center of the economic engine of the entire continent, moving goods across a network that would be nearly impossible to replicate today.

Part of the reason for that can be traced back to Canadian National’s massive rail network. That network connects the east and west coasts of Canada, as well as traverses through the U.S. Midwest to the Gulf region. This gives the railway a major advantage with access to three coastlines.

The goods that Canadian National hauls vary. Each year, the railway hauls nearly 300 million tons of freight, valued at over $250 million dollars. That freight can be anything from automotive parts and chemicals to crude oil and wheat. More importantly, it includes both essential items, raw materials and finished goods, furthering its importance.

The diversified mix of freight provides Canadian National with yet another key advantage for investors to consider. In fact, Canadian National’s rail network is often referred to as an arterial vein for the entire North American economy.

That rail network connects to major metro markets across the continent, linking factories, warehouses, and ports. Over time, communities have built up around those tracks, making it harder for any would-be competitor to build out an adjacent, competing network.

In short, it would take a decade or more in construction time and cost tens of billions of dollars. To say that this makes the Canadian dividend growth stock a highly defensive pick for investors would be an understatement.

Why you need this Canadian dividend growth stock

One of the main reasons why investors turn to Canadian National is for the railway’s quarterly dividend. Canadian National offers a quarterly dividend that, as of the time of writing, works out to a yield of 2.4%.

While that may not seem like the highest yield on the market, that yield conceals Canadian National’s true appeal. The railway has provided generous annual upticks to that dividend for three decades without fail.

This means that this Canadian dividend growth stock continues to provide investors with a combination of stability and growth that accelerates long-term compounding. Specifically, the railway has averaged up to 13% annual growth over the past decade.

Canadian National has also provided investors with buybacks. In 2025 alone, the railway completed a buyback of 15 million shares valued at nearly $2 billion. Turning ahead to 2026, the railway plans to maintain that focus.

Prospective investors should note that Canadian National trades at a discounted level at the moment. That discount reflects temporary headwinds like U.S. tariffs, which impacted revenue numbers, but kept the railway profitable. Adding to that is the railway’s payout ratio, which remains below 50%.

That adds to the long-term appeal of this Canadian dividend growth stock.

Are you buying this Canadian dividend growth stock?

Canadian National is built for investors who think in decades, not quarters. The railway’s defensive infrastructure and proven dividend growth make it a great option for long‑term portfolios.

In my opinion, Canadian National should be a core holding in any well-diversified portfolio.

Buy it, hold it, and watch your portfolio (and income) grow.

The post A Dirt-Cheap Canadian Dividend Growth Stock Built for the Long Haul appeared first on The Motley Fool Canada.

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More reading

• Here Are My Top 3 TSX Stocks to Buy Right Now
• 3 Long-Term Buying Opportunities You’ll Kick Yourself for Not Buying in May
• 5 Canadian Stocks I’d Feel Good About Holding for 10 Years
• 5 Canadian Stocks I’d Buy If I Wanted Instant Income
• A Reasonably Priced Safety Stock That Canadian Retirees Might Want to Know About

Fool contributor Demetris Afxentiou has positions in Canadian National Railway. The Motley Fool recommends Canadian National Railway. The Motley Fool has a disclosure policy.