Investing in Oil and Railroads?

Ask Hank Letter June 2026

Owning and investing in cash-flowing real estate has always been my favourite thing to do. One day a week, I analyze investment properties available in Nova Scotia. When I find one that interests me, I switch from Viewpoint.ca to realtor.ca, track down the listing agent and send an email requesting three years of financials.

It’s rare today to get a response within 24 hours. People are busy and have balance, and usually I look at properties on the weekend so no surprise some phones may be off. Regardless, I find it positive when an agent gets back to me that day.

Usually, I’m asked if I have an agent working for me and am serious, so I say this:

“I’ve been investing for over 45 years. When I see the financials, 9/10 times nothing happens. When an offer is warranted, I have a professional who will present the offer. I don’t want to waste anyone’s time on the 9 that never get to that point.” If I get flak, I simply suggest that I will contact the seller directly and just request the financials.

Usually, that triggers an immediate send of the financials.

Once received, I now run them through AskHank.money.

So, when I found this listing I got to work. 

The Ask Hank analysis is in the Appendix of this letter. It is crazy overpriced.

Based on the listing price, the cost per bed is $80,000. I know right away that for a student property, it’s overpriced.

Other issues include the cost of utilities and repairs, and, frankly, the list price has no real basis for me. The suggested Hank Value is about $300,000 less than the listing price.

It is likely that a novice investor will pay close to the asking. Someone is dying to get into rentals. The problem is that they will only lose money. Taking the 20% down payment and investing in another liquid asset until the market recognizes true value is what I would do.

But what if you had the full asking price in cash? Would it change anything? Absolutely not. That analysis is in the Appendix as well. Paying $720,000 or even $450,000 does not make it a good cash investment. At $450,000, it’s just a boring 6.9% return with all of the headaches.

This property as an investment vehicle is so overpriced it’s not worth discussing any longer.

Know your value, know your numbers before you invest in any investment property.

Introducing the Hank Transportation ETF.

There is a lot going on now with the US and Canada, oil prices, energy, and the economy. But what if we looked at three companies that basically have a monopoly on moving oil, gas and materials? Let’s look at Enbridge, Canadian Pacific Kansas City, and Canadian National. The two railway companies have a monopoly on moving goods in North America. Enbridge is an energy transportation company, primarily for oil. If we look at the 30-year history, investing just $10,000 in these three would, today, result in the portfolio growing to $535,000, with the railroads as the main engine of growth. That equates to an annual return of 14%, compared with 8.8% for the TSX. Knowing that past performance is no indication of future performance, it still makes sense to me to nibble a bit and create a small ETF to start with these three stocks inside. Just a $10,000 equally distributed amongst the three, and to put under the mattress if you will.

So, what am I doing now?

Apart from the new ETF and the three stocks, I’m not doing any investing other than reading reports, checking real estate weekly and staying emotionally boring.

No screaming opportunities out there other than a continual analysis of existing investments I have, with no new ones on the watch list.

Outside of investing, I am working on a new book that will be released on August 3^rd .

Over the last while, many of the thoughts and stories I’ve shared here slowly became a book.

It’s called:

Can You Buy Happiness: Why Success and Happiness Rarely Match

The preorder is now quietly available at:
buyhappiness.askhank.money

On a final note, over 2,500 investors subscribe to this monthly letter. If you know of someone who you think could benefit, send them the link and let them know what to expect. Let’s help increase the success of all private investors out there.

Have an amazing month, and we’ll talk again in July.

Hank

Appendix

Ask Hank™ Pipeline Comparison Summary

Date: May 4, 2026

Based on full Ask Hank™ analyses using user-provided audited financial statements and prices.

Rankings (Hank Method)

1. Keyera (KEY) — Score: 73/100

- Best overall value at current price

- Strong cash flow yield (~6.1%)

- Sustainable dividend (~66% payout)

- Transitioning to higher-quality fee-based model

2. Pembina (PPL) — Score: 72/100

- Strong yield (~4.5%) and cash flow (~6.8%)

- Slightly weaker per-share growth and past dilution

3. Enbridge (ENB) — Score: 71/100

- Highest quality and strongest moat

- Lower cash flow yield (~3.5%)

- Premium valuation for safety

4. TC Energy (TRP) — Score: 67/100

- Improving business after restructuring

- Weak free cash flow yield (~1%)

- Higher leverage and capital intensity

Key Insight

Best business ≠ best investment.

Enbridge is the safest.

Keyera offers the best return at current pricing.

Portfolio Construction (Hank Style)

Core: Enbridge (stability)

Return driver: Keyera / Pembina

Optional growth: TC Energy (monitor improvement)

Hank Bottom Line

Keyera is the best buy right now.

Enbridge is the best long-term business.

Use both for a balanced portfolio.

Ask Hank™ One-Page Summary

Date: May 4, 2026

Company: Keyera Corp.

Price: C$52.80

Hank Score: 73/100

Keyera is a Canadian midstream company with gas processing, NGL infrastructure, and marketing operations tied to the Western Canadian basin.

From 2023–2025, revenue declined slightly while EPS stayed flat (~1% growth). Distributable cash flow remains strong at ~C$3.21/share. Dividend is growing (~4% CAGR) with a ~66% payout.

At C$52.80, the Hank Cap Rate is ~6.1% and dividend yield ~4.0%. Debt is manageable (~3x EBITDA), but capital spending and acquisitions are increasing.

The company is shifting from volatile marketing income toward stable fee-based infrastructure, which is positive long-term.

Risks include flat per-share growth, marketing volatility, and execution on large acquisitions.

Hank Verdict: Good cash-flow infrastructure business at a fair price. Better for income than compounding. Not a deep value buy.

Ask Hank™ One-Page Summary

Date: May 4, 2026

Company: Pembina Pipeline

Price: C$63.20

Hank Score: 72/100

Pembina is a Canadian midstream infrastructure company with pipelines, gas processing, NGL fractionation, storage, marketing, export terminals, Alliance/Aux Sable, PGI, and Cedar LNG exposure.

Revenue grew from C$6.3B in 2023 to C$7.8B in 2025, but EPS fell from C$3.00 to C$2.67. Cash flow is stronger than earnings. 2025 operating cash flow was C$3.3B and conservative free cash flow was about C$2.5B.

At C$63.20, P/B is about 2.19x. Hank Cap Rate is about 6.85%. Dividend yield is about 4.46%, with payout around 65% of conservative free cash flow.

Debt is manageable at about C$12.7B including hybrid notes. Bankruptcy risk is low. Related-party review found normal equity-investee transactions, with Cedar LNG and Greenlight worth monitoring.

Hank Verdict: Good cash-flow business, fair price, not a deep bargain. Watch per-share growth.

Ask Hank™ One-Page Summary

Date: May 4, 2026

Company: TC Energy

Price: C$90.63

Hank Score: 67/100

TC Energy is now mainly a natural gas and power infrastructure company after spinning off South Bow. It owns critical assets across Canada, the U.S., and Mexico and moves over 30% of North America’s natural gas. The moat is real.

Revenue grew to C$15.2B in 2025. Net income to common shareholders was C$3.4B. Operating cash flow was C$7.35B, but after C$6.34B of capital spending, conservative free cash flow was only about C$1.0B.

At C$90.63, price-to-book is about 3.77x. Conservative Hank Cap Rate is about 1.1%, while operating cash-flow yield is about 8.5%. Dividend yield is about 3.75%, covered by funds generated but not comfortably by conservative free cash flow.

Main risk: debt. Long-term debt is C$46.8B, plus C$12.1B junior notes.

Hank Verdict: Good business, cleaner structure, real moat, low bankruptcy risk — but not cheap and still debt-heavy.

Ask Hank™ One-Page Summary

Date: May 4, 2026

Company: CPKC

Price: C$117.16

Hank Score: 78/100

CPKC is a high-quality railroad with a rare moat: the only single-line rail network connecting Canada, the U.S., and Mexico. Revenue grew from C$12.6B in 2023 to C$15.1B in 2025. Operating income improved to C$5.6B. EPS grew modestly to C$4.51.

The balance sheet is sound, with about C$23.2B of debt and very low bankruptcy risk. Free cash flow was about C$2.17B in 2025, or C$2.42/share. At C$117.16, the Hank Cap Rate is only about 2.1%, and price-to-book is about 2.3x.

The moat is excellent, but the price already reflects much of the Mexico growth story. Graham value is around C$72, so this is not a bargain.

Hank Verdict: Excellent railroad, strong moat, low bankruptcy risk, but full valuation. Watchlist, not obvious bargain.

Ask Hank™ Summary

Date: May 4, 2026

Company: Enbridge

Price: $74.58

Score: 71/100

Enbridge is a regulated energy infrastructure company generating stable, utility-like cash flows. Revenue and cash flow are growing modestly, but EPS is largely flat. Growth comes from acquisitions and capital deployment, not organic expansion.

The stock yields ~6.7% with a payout ratio around 65–75% of distributable cash flow. Debt has increased significantly, rising to ~90B, making interest rates and capital markets critical to future growth.

At current pricing, investors are buying income plus low-single-digit growth. Graham valuation suggests it is not cheap.

Hank Verdict: Strong income vehicle, not a high compounder. Works best when bought for yield, not upside.

Ask Hank™ Summary

Date: May 4, 2026

Company: CN Rail

Price: $152.19

Score: 77/100

CN is a high-quality rail monopoly with strong cash flow, a durable moat, and disciplined capital allocation. Revenue is stable, but earnings and EPS are below 2023 levels. Dividends and book value are growing ~6%.

At this price, CN trades at ~4.3x book and generates ~3.6% free cash flow yield. That is not cheap. Debt is rising moderately, and capital intensity remains high.

No governance issues found.

Hank Verdict: Great company, fair-to-rich price. Expect steady but not exceptional returns unless bought cheaper.

Ask Hank™ Summary — Fairfax Financial

Date: April 28, 2026

Share price: C$2,361

Hank Score: 85.5 / 100

Fairfax is a strong insurance compounder. Book value/share grew from US$939.65 in 2023 to US$1,260.19 in 2025, about 15.8% CAGR. Revenue grew about 10.2% CAGR. Diluted EPS grew about 11.1% CAGR.

At the provided price, the estimated P/B is about 1.37x, using a CAD/USD rate of 1.37. Conservative Hank Cap Rate is about 8.7%, using normalized owner earnings of about US$150/share. Payback is roughly 11.5 years.

Strengths: large insurance float, strong underwriting, growing investment portfolio, major share buybacks, and long-term capital allocation discipline.

Watch items: softening in the insurance cycle, catastrophe losses, rising debt, volatility in investment gains, and related-party governance.

Stink Test: Smelly Potential — Needs Monitoring. Key items include the 2024 purchase of 275,000 shares from Prem Watsa for $304.3M and the $100.4M investment in the Marval Guru Fund, managed by a related party.

Verdict: good business, fair-to-good price, not dirt cheap. Monitor governance yearly.

Ask Hank™ Summary — April 28, 2026

BRK.B at $472.81 scores 84/100.

This is one of the strongest balance sheets in the world: about $373B in cash and T-Bills, $717B in Berkshire equity, and manageable parent debt. Revenue was steady from 2023 to 2025; book value grew strongly, but reported earnings fell because Berkshire’s investment markups fluctuated.

Book value per B share is about $332.56, so price-to-book is about 1.42x. Normalized free cash flow per B share is about $10.27, yielding a Hank Cap Rate of approximately 2.17%. That is not cheap. The business is excellent, but the price already gives it a head start.

Governance is clean. The Pilot dispute was the main related-party item and was settled. No small related-party vendor payments were found in the audited notes.

Hank Verdict: fortress company, fair-to-full price. Great survival asset. Not a screaming bargain.

Ask Hank™ Rental Analysis – 58 Marsh Hawk Dr, Wolfville

UPDATED ASSUMPTION: Purchase price $720,000, 20% down, 5.5% rate, 25-year amortization.

Income (5-year average): ~$62,693/year (~$5,224/month).

Expenses (5-year average): ~$31,516/year (~$2,626/month).

Net Operating Income (NOI): ~$31,177/year (~$2,598/month).

Mortgage (estimated): ~$3,500/month.

Cash Flow (before buffers): –$902/month.

Adjusted for vacancy + contingency: ~–$1,350/month.

Utilities (landlord paid): ~$12,932/year (~$1,078/month). High risk exposure.

Hank Cap Value: ~$390K–$415K.

Hank Shortcut Value: ~$522K.

Updated Price: $720K.

Verdict: Still significantly overpriced relative to income. Negative cash flow persists. PASS at

current price.

Hank Suggested Offer Range: ~$425K–$500K.

Disclaimer: This Hank Rental Analysis is for educational purposes only. Do not make offers without

consulting advisors and verifying all numbers.

Ask Hank™ Rental Comparison – 58 Marsh Hawk Dr

Comparison: All Cash Purchase Scenarios

Price 1: $720,000 (List)

Price 2: $450,000 (Hank Offer)

Verdict:

$720K: Not an income investment. Low return, high risk. PASS.

$450K: Meets minimum return threshold. BUY ZONE (with due diligence).

Hank Rule:

Make your money when you buy, not when you hope.

Disclaimer:

This Hank Rental Analysis is for educational purposes only. Do not make offers to buy or sell without consulting with your advisors and gathering accurate and valid expense and rental information.