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Multiple Tailwinds Aid Canadian Pacific: Retain Stock for now
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We have issued an updated research report on Canadian Pacific Railway Limited (CP - Free Report) on Sep 20.
The company’s shares have underperformed the industry in a year’s time, primarily due to high-operating expenses and debt levels. The stock has gained 23.2% compared with the industry’s rise of 28.4%.
The Calgary, Canada-based company does not witness positive developments. Let’s discuss the factors in detail.
This railroad operator benefits from buoyant freight scenario as majority of its revenues are generated from this source. In fact, strong freight revenues are projected to boost third-quarter results, scheduled to be released on Oct 18. Additionally, the stock is likely to gain if the revamped NAFTA (North American Free Trade Agreement) deal materializes.
Moreover, we are positive about the ratification of the four-year agreement with the union representing conductors and locomotive engineers. Additionally, System Council No. 11 of the International Brotherhood of Electrical Workers also ratified a three-year agreement. The ratified agreements are huge positives as satisfied labor forces generally lead to operational efficiency.
Furthermore, Canadian Pacific’s efforts to reward shareholders in the form of buybacks and increased dividend payments are impressive. Earlier this year, the company raised quarterly dividend by 15.5% to C$0.65 per share. The company is also active on the buyback front
Moreover, Canadian Pacific has a trailing 12-month return on equity (ROE) of 27.9%, which compares favorably the industry’s ROE of 20.8%. The favorable ROE indicates growth potential and implies efficient utilization of shareholders’ funds.
The company has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.
Considering these tailwinds, we believe that Canadian Pacific should be retained by investors for now. The Zacks Rank #3 (Hold) carried by the stock seems to suggest the same.
Shares of ArcBest, Triton International and Old Dominion have gained 38.7%, 23.3% and 7.8% in the past six months, respectively.
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Multiple Tailwinds Aid Canadian Pacific: Retain Stock for now
We have issued an updated research report on Canadian Pacific Railway Limited (CP - Free Report) on Sep 20.
The company’s shares have underperformed the industry in a year’s time, primarily due to high-operating expenses and debt levels. The stock has gained 23.2% compared with the industry’s rise of 28.4%.
The Calgary, Canada-based company does not witness positive developments. Let’s discuss the factors in detail.
This railroad operator benefits from buoyant freight scenario as majority of its revenues are generated from this source. In fact, strong freight revenues are projected to boost third-quarter results, scheduled to be released on Oct 18. Additionally, the stock is likely to gain if the revamped NAFTA (North American Free Trade Agreement) deal materializes.
Moreover, we are positive about the ratification of the four-year agreement with the union representing conductors and locomotive engineers. Additionally, System Council No. 11 of the International Brotherhood of Electrical Workers also ratified a three-year agreement. The ratified agreements are huge positives as satisfied labor forces generally lead to operational efficiency.
Furthermore, Canadian Pacific’s efforts to reward shareholders in the form of buybacks and increased dividend payments are impressive. Earlier this year, the company raised quarterly dividend by 15.5% to C$0.65 per share. The company is also active on the buyback front
Moreover, Canadian Pacific has a trailing 12-month return on equity (ROE) of 27.9%, which compares favorably the industry’s ROE of 20.8%. The favorable ROE indicates growth potential and implies efficient utilization of shareholders’ funds.
The company has an impressive VGM Score of B. Here V stands for Value, G for Growth and M for Momentum and the score is a weighted combination of all three scores.
Considering these tailwinds, we believe that Canadian Pacific should be retained by investors for now. The Zacks Rank #3 (Hold) carried by the stock seems to suggest the same.
Stocks to Consider
A few better-ranked stocks in the broader Transportation Sector are ArcBest Corporation (ARCB - Free Report) , Triton International Limited and Old Dominion Freight Line, Inc. (ODFL - Free Report) . While Triton International carries a Zacks Rank #2 (Buy), ArcBest and Old Dominion sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Shares of ArcBest, Triton International and Old Dominion have gained 38.7%, 23.3% and 7.8% in the past six months, respectively.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>