Investment Q&A

Of course, nothing is guaranteed in investing, and even a high degree of confidence should still leave room for error. With that said, most railroads have been under pressure in recent years due to the industry’s cyclical downturn, along with noise around tariffs. These companies are now trading at low valuation multiples compared to their historical averages. While this is not a high-growth sector with life-changing wealth opportunities, we think railroads are close to “forever” infrastructure assets that could provide investors returns of around 11%–13% over the long term, depending on valuation and the individual company.

We think a basket of railroads could do well for conservative investors, but we would be selective and focus on best-in-class operators such as CP, UNP, and CNR.