We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Here's Why Investors Should Retain Canadian Pacific KC Stock
Read MoreHide Full Article
Canadian Pacific Kansas City (CP - Free Report) is bolstered by robust cost-cutting initiatives, which contribute to the company’s prospects. The shareholder-friendly approach also bodes well for the company. However, CP is grappling with weak liquidity.
Factors Favoring CP
Canadian Pacific's proactive cost-cutting initiatives are commendable, resulting in impressive operational efficiencies in the second quarter of 2024. The company achieved an 8% reduction in the average terminal dwell time and increased average train speed by 6%, showcasing enhanced processing capabilities and improved network fluidity.
In the same period, locomotive productivity rose by 8%, while fuel efficiency enhanced by 2%, highlighting CP's commitment to operational excellence and sustainability.
CP’s commitment to rewarding its shareholders through dividends amid uncertainties reflects its financial confidence. With dividend payouts increasing from C$507 million in 2021 to C$707 million in 2022 and 2023, its financial growth and proactive approach to rewarding shareholders are underscored. In the third quarter of 2024, the company paid out a quarterly dividend of 19 cents per share to its shareholders.
CP: Key Risks to Watch
Canadian Pacific’s financial stability is challenged by soaring operating expenses and weak liquidity, significantly influencing the company’s bottom line. In the third quarter of 2024, total operating expenses rose by 8.3% year over year. This surge in operating expenses is primarily driven by escalated labor costs.
Weak liquidity does not bode well for CP. Canadian Pacific exited the September-end quarter with a current ratio (a measure of liquidity) of 0.53. A current ratio of more than 1 is always considerable, as a current ratio of less than 1 indicates that the company does not hold sufficient cash to meet its short-term obligations.
Shares of Canadian Pacific have declined 3.9% year to date compared with its industry’s fall of 1.1% in the same period.
Westinghouse Air Brake Technologies currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. WAB has an expected earnings growth rate of 2.01% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 9.46%. Shares of WAB have risen 73.1% in the past year.
SkyWest currently sports a Zacks Rank #1 and has an expected earnings growth rate of 4.07% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 79.12%. Shares of SKYW have climbed 140.5% in the past year.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Here's Why Investors Should Retain Canadian Pacific KC Stock
Canadian Pacific Kansas City (CP - Free Report) is bolstered by robust cost-cutting initiatives, which contribute to the company’s prospects. The shareholder-friendly approach also bodes well for the company. However, CP is grappling with weak liquidity.
Factors Favoring CP
Canadian Pacific's proactive cost-cutting initiatives are commendable, resulting in impressive operational efficiencies in the second quarter of 2024. The company achieved an 8% reduction in the average terminal dwell time and increased average train speed by 6%, showcasing enhanced processing capabilities and improved network fluidity.
In the same period, locomotive productivity rose by 8%, while fuel efficiency enhanced by 2%, highlighting CP's commitment to operational excellence and sustainability.
CP’s commitment to rewarding its shareholders through dividends amid uncertainties reflects its financial confidence. With dividend payouts increasing from C$507 million in 2021 to C$707 million in 2022 and 2023, its financial growth and proactive approach to rewarding shareholders are underscored. In the third quarter of 2024, the company paid out a quarterly dividend of 19 cents per share to its shareholders.
CP: Key Risks to Watch
Canadian Pacific’s financial stability is challenged by soaring operating expenses and weak liquidity, significantly influencing the company’s bottom line. In the third quarter of 2024, total operating expenses rose by 8.3% year over year. This surge in operating expenses is primarily driven by escalated labor costs.
Weak liquidity does not bode well for CP. Canadian Pacific exited the September-end quarter with a current ratio (a measure of liquidity) of 0.53. A current ratio of more than 1 is always considerable, as a current ratio of less than 1 indicates that the company does not hold sufficient cash to meet its short-term obligations.
Shares of Canadian Pacific have declined 3.9% year to date compared with its industry’s fall of 1.1% in the same period.
Image Source: Zacks Investment Research
CP’s Zacks Rank
CP currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
Investors interested in the Zacks Transportation sector may consider Westinghouse Air Brake Technologies (WAB - Free Report) and SkyWest (SKYW - Free Report) .
Westinghouse Air Brake Technologies currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. WAB has an expected earnings growth rate of 2.01% for the current year.
The company has an impressive earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters and missed once, delivering an average beat of 9.46%. Shares of WAB have risen 73.1% in the past year.
SkyWest currently sports a Zacks Rank #1 and has an expected earnings growth rate of 4.07% for the current year.
The company has an encouraging track record with respect to the earnings surprise, having surpassed the Zacks Consensus Estimate in each of the trailing four quarters. The average beat is 79.12%. Shares of SKYW have climbed 140.5% in the past year.