To The Moon

💬 Ever seen two blue-chip Canadian giants get thrown out with the trash?

CNR and Telus are both getting crushed — but is the market overreacting? This might be one of the best contrarian setups of the year.

When a stock drops 25%, the market starts calling it a “value trap.”

When another stock plunges nearly 10% in one day on dividend panic, people hit sell.

That’s exactly what’s happening to Canadian National Railway (CNR) and Telus (T).

The real question:

Is the market being too hasty — prematurely writing off two infrastructure giants?

1. The Written-Off Railway: $Core Natural Resources, Inc.(CNR)$ ’s Short-Term Pain, Long-Term Moat

CNR’s share price has fallen roughly 25% since March 2024.

The surface story is clear: freight volumes have weakened.

In 2024, labor disputes, port strikes, and extreme weather disrupted operations.

In 2025, U.S. tariffs on petroleum products, steel, aluminum, and lumber tested investor patience, even forcing CNR to abandon its mid-term growth outlook.

Sounds like a company in trouble, right?

But if you only watch the stock price, you miss the real story:

CNR is not standing still.

Management quickly shifted focus to efficiency — cost cuts, better asset utilization, and improved locomotive productivity.

The result?

In 2025, even as freight for metals and forest products declined, agricultural and intermodal volumes rose.

The company still delivered 1% revenue growth and 8% EPS growth.

More importantly, CNR just raised its 2026 dividend by 3%.

Its free-cash-flow payout ratio is only 66% — very comfortable.

The company expects flat revenue in 2026: no boom, but no collapse.

The contrarian core:

Governments are pushing export diversification, building new ports, airports, and rail infrastructure.

This transition will lift freight volumes over the medium term.

Patient investors in CNR don’t just collect an annual dividend of $3.66 per share — they also stand to benefit from a valuation re-rating.

2. The Telecom “BCE Playbook”: $Telus Corp(TU)$ ’s Dividend Panic = Opportunity

If CNR was caught in the crossfire of trade tensions, Telus is facing a self-fulfilling market psychology collapse.

Telus’s stock has dropped roughly 25% in the past year, including a 9.8% one-day crash on dividend-cut fears.

In December 2025, the company paused dividend growth, sending shares down 12% at the time.

Its payout ratio — including the DRIP — has surged to 110%, putting real pressure on its balance sheet.

But does this feel familiar?

In May 2025, after BCE cut its dividend, its stock rebounded 20%.

The logic is simple:

Once the dividend “landmine” explodes, uncertainty disappears — and the stock bottoms.

Telus management has been clear:

It plans to bring net debt down to 3x adjusted EBITDA and grow free cash flow at 10% annually.

Even with DRIP, the payout ratio is expected to fall back to 100% by 2027.

In other words, the worst-case scenario is that Telus follows BCE’s path:

cut the dividend, then start a recovery rally.

For value investors, the moment the market writes off Telus out of fear

could be the perfect window to buy.

The Shared Contrarian Foundation: Uncopyable Economic Moats

CNR and Telus operate in different industries, but they’re being sold for nearly identical reasons:

high capital spending, slowing top-line growth, and profits driven by cost cuts.

These are real weaknesses — but the market keeps forgetting the flip side:

their moats are built with time and money that no competitor can match.

• CNR owns a continental rail network across North America —

  nearly impossible for a new entrant to replicate.

• Telus owns massive fiber and wireless infrastructure —

  with a replacement cost in the hundreds of billions of dollars.

When the macro dust settles,

CNR will operate more efficiently,

and Telus will emerge with a cleaner balance sheet and more flexible financial structure.

Investor View: Contrarian — Not Blind

To be clear: “contrarian” does not mean buying blindly.

CNR still faces ongoing trade policy uncertainty.

Telus’s dividend decision remains unresolved.

But if you believe two simple ideas:

1. The market often exaggerates short-term problems into permanent failures.

2. The scarcity and replacement cost of infrastructure assets will eventually show up in valuations.

Then the current pullback in CNR and Telus looks less like a trap —

and more like a discount ticket for patient investors.

As one Toronto-based fund manager put it privately:

“The moment the market writes them off is exactly when we turn the page.”