The Financial Post reports in its Friday edition that Canadian National Railway ($76.75) has hinted its dividend hike in January could be juicy. The Post's Jonathan Ratner writes in the Trading Desk column that Scotiabank analyst Turan Quettawala thinks the dividend increase could be as high as 24 per cent based on a payout ratio of 30 per cent. Mr. Quettawala says, "We have mentioned in the past that CNR should raise its payout considering its strong and predictable earnings." Mr. Quettawala notes that a long-term payout ratio of about 35 per cent may be realistic, but "in true CNR style," he thinks any increases will probably come in a few increments. The analyst notes that raising the payout ratio to 35 per cent would result in an impressive 45-per-cent dividend increase that investors will surely jump on. From a cash usage perspective that is equivalent to additional cash dividends of $200-million, "which carries almost no risk in both good times and bad considering CNR's cash generating potential and its strong balance sheet." Mr. Quettawala says, "Capital return to shareholders remains a priority for CNR." CIBC maintained a "sector perform" rating on CN in the Post on July 3 when it was worth $69.60.