West Japan Railway (OTCMKTS:WJRYY) & Canadian National Railway (NYSE:CNI) Head to Head Analysis

West Japan Railway (OTCMKTS:WJRYY) and Canadian National Railway (NYSE:CNI) are both large-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, dividends, risk, valuation, profitability, analyst recommendations and institutional ownership.

Valuation and Earnings

This table compares West Japan Railway and Canadian National Railway”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Japan Railway	$11.22 billion	0.94	$752.13 million	$1.80	12.47
Canadian National Railway	$12.44 billion	4.85	$3.25 billion	$5.20	18.59

Canadian National Railway has higher revenue and earnings than West Japan Railway. West Japan Railway is trading at a lower price-to-earnings ratio than Canadian National Railway, indicating that it is currently the more affordable of the two stocks.

Dividends

West Japan Railway pays an annual dividend of $0.51 per share and has a dividend yield of 2.3%. Canadian National Railway pays an annual dividend of $2.59 per share and has a dividend yield of 2.7%. West Japan Railway pays out 28.3% of its earnings in the form of a dividend. Canadian National Railway pays out 49.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Canadian National Railway has raised its dividend for 3 consecutive years. Canadian National Railway is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a summary of current ratings and target prices for West Japan Railway and Canadian National Railway, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Japan Railway	0	0	0	0	0.00
Canadian National Railway	2	9	7	2	2.45

Canadian National Railway has a consensus target price of $118.36, indicating a potential upside of 22.41%. Given Canadian National Railway’s stronger consensus rating and higher probable upside, analysts clearly believe Canadian National Railway is more favorable than West Japan Railway.

Insider & Institutional Ownership

80.7% of Canadian National Railway shares are held by institutional investors. 2.4% of Canadian National Railway shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Risk and Volatility

West Japan Railway has a beta of 0.36, meaning that its stock price is 64% less volatile than the S&P 500. Comparatively, Canadian National Railway has a beta of 0.94, meaning that its stock price is 6% less volatile than the S&P 500.

Profitability

This table compares West Japan Railway and Canadian National Railway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Japan Railway	7.25%	9.59%	3.29%
Canadian National Railway	26.63%	21.71%	8.04%

Summary

Canadian National Railway beats West Japan Railway on 17 of the 18 factors compared between the two stocks.

About West Japan Railway

West Japan Railway Company provides railway transport services in Japan. The company operates through Mobility, Retail, Real Estate, Travel and Regional Solutions, and Other segments. The Mobility segment provides passenger transportation, station operation and management, cleaning and maintenance, construction, machinery and equipment installation, rolling stock and other facility construction services, as well as engages in the railway operations and electric works. The Retail segment sells goods; offers food and other wholesale operation services; and operates department stores. The Real Estate segment sells and leases real estate properties, as well as operates shopping centers and hotels. The Travel and Regional Solutions segment provides travel agency and regional solutions. The Other segment engages in the advertising and other businesses. The company is also involved in the operation of convenience stores, restaurants, and souvenir shops; and provision of credit cards and electronic money services. The company was incorporated in 1987 and is based in Osaka, Japan.

About Canadian National Railway

Canadian National Railway Company, together with its subsidiaries, engages in the rail, intermodal, trucking, and marine transportation and logistics business in Canada and the United States. The company provides rail services, which include equipment, custom brokerage services, transloading and distribution, business development and real estate, and private car storage services; and intermodal services, such as temperature controlled cargo, port partnerships, and logistics parks. It offers trucking services, such as door-to-door services, import and export dray, interline services, and specialized services, comprising flatbed trucks, on-deck mobile transport trays, expedited cargo, and permit/overweight services; and supply chain services. It serves automotive, coal, fertilizers, temperature controlled cargo, forest products, dimensional, grain, metal and minerals, petroleum and chemicals, consumer goods, and third party logistics applications. The company operates a rail network of approximately 20,000 route-miles of track and shipping spanning. Canadian National Railway Company was incorporated in 1919 and is headquartered in Montreal, Canada.