Time to Buy? 1 Dividend Stock Offering a Decent Deal

With market volatility picking up ahead of mid-month, investors might be wondering whether there are any good deals available, especially as geopolitical turmoil is prompting some investors to hit the sell button. Undoubtedly, after the recent choppy waters, investors might be able to score a bargain on some dividend payers that have been long forgotten, either due to a nasty chart or a recent track record of coming up short of the TSX’s gains.

Though shares of CN Rail (TSX:CNR) may seem like a prime candidate to sell to kick off the year, given its lack of momentum and potential to revisit those 52-week lows, I think that the lack of catalysts in 2026 is not necessarily a reason to liquidate an entire position, especially since it’s times like these, when the big rail firms barely make headlines, when the blue chips like CN Rail tend to offer the best deals.

Undoubtedly, 2026 might not be any better than 2025, but CN Rail is still poised to continue growing its dividend. And after yet another slump, perhaps it’s the swelling dividend yield that should entice investors to buy on the dip, while many others opt to sell and move on to timelier stocks or even the broader TSX Index, which has outperformed shares of CNR in recent years.

A lack of news has made CNR stock quite untimely

With a lack of needle-moving news, it seems like new value investors are just waiting for that next quarter before deciding on the next course. With shares down more than 5% in the past year, and the threat of tariffs that could drag shares lower from here, CNR stock seems rather untimely.

And while the 2.63% dividend yield is uncompetitive compared to most other dividend stocks, I find that the rail stock offers a good balance between dividend growth and upfront yield.

While I wouldn’t start pounding the table until the yield is above 3%, I think that longer-term investors who value dividend growth might find $135 per share to be a decent entry point. With a solid balance sheet and the door potentially open to acquisitions, CNR stock might have a more eventful 2026 than expected.

CNR stock looks like a good, but not great, deal for those seeking cheap dividend growers

If freight volumes start to gain momentum and investors shift back to the long-term wealth compounders (a bear market in tech could do it), perhaps CNR stock might catch a bid higher. Until earnings start impressing, though, 2026 could be another lost year for the firm. The major upside, I think, could come from a sudden surge in grain volumes and various operating efficiencies that could offset a portion of those macro headwinds.

Of course, growth forecasts for the new year are rather muted. A low expectations bar alone might be enough reason to hop aboard CNR here. Just don’t expect a quick bounce.

Bottom line

Unless you’re a value investor who seeks greater exposure to the industrial sector or you’re looking for a long-term dividend grower, it might be a bit too soon to load up. Personally, I’d like to see an impressive quarter followed by a more upbeat year-ahead forecast.

But, of course, by then, you’d probably be paying closer to 21 times trailing price to earnings (P/E) for shares, rather than around 18 times P/E. In short, CNR stock remains shrouded in uncertainty. But it’s times like these, when the future is uncertain, when a name like CNR stock might be worth stashing in a Tax-Free Savings Account for the next five years.

The post Time to Buy? 1 Dividend Stock Offering a Decent Deal appeared first on The Motley Fool Canada.

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More reading

• 3 Canadian Stocks That Are the Best to Buy and Hold in a TFSA
• 3 Beginner-Friendly Stocks Perfect for Canadians Starting Out Now
• Where Will Canadian National Stock Be in 3 Years?
• TSX Today: What to Watch for in Stocks on Tuesday, January 13
• 2 Dividend-Growth Stocks to Buy and Hold Through 2026

Fool contributor Joey Frenette has positions in Canadian National Railway. The Motley Fool recommends Canadian National Railway. The Motley Fool has a disclosure policy.