Continuing on from last weeks Dividend Stock Analysis for Canadian National Railway (TSE: CNR) I will do an analysis of Canadian Pacific Railway to see which one is currently the better dividend stock pick. Like always, my analysis is value oriented and the final result is purely based of the numbers, so lets get to it ans see how TSE: CP stacks up in this weeks Dividend Stock Analysis.
About the company:
Here is Canadian Pacific's description of what they do, which can be found on their website here
"For more than 125 years Canadian Pacific Railway has been part of the fabric of this great nation. The same application of experience and ingenuity that allowed us to build a railroad through some of the toughest terrain on earth continues to power our business solutions. Our focus has changed since we began binding a nation together in 1881, but we continue to fulfill our original mandate – linking people to each other and to the world. Today we move the goods that move North America's economy.
Based in Calgary, Alberta, Canadian Pacific Railway (CPR) is a Class 1 North American railway providing freight transportation services over a 14,000-mile network in Canada and the U.S. Our high density network serves virtually every major sector and ships commodities like grain, coal, lumber and potash as well as cars, agricultural equipment, home electronics, food and furniture."
What the professionals think:
| Source |
Value |
Score |
| Is it a Dividend Aristocrat: |
No |
0 |
| Is it a Dividend Achiever: |
No |
0 |
| Globe Investor Rating: |
4 Stars |
0.25 |
Score: 0.25/1.5
Dividend performance:
Dividend Information acquired at DividendInvenstors.ca
| Measurement |
Value |
Measurement |
Value |
| Dividend Rate: |
$0.99 |
Quarterly Dividend Rate: |
$0.2475 |
| Current Dividend Yield: |
1.50% |
5 yr. Avg. Dividend Yield: |
1.30% |
| 3 yr. Dividend Growth: |
17.86% |
5 yr. Dividend Growth: |
12.66% |
| Payout Ratio: |
17.00% |
5 yr. Historic Payout Ratio: |
17.00% |
| Measurement |
Value |
Score |
| Is current Yield > Avg Yield: |
Yes |
1 |
| > 10% dividend growth per year: |
Yes |
1 |
| > 5 yrs of dividend growth: |
Yes |
1 |
| payout ratio <= historic payout ratio: |
Yes |
1 |
Score: 4.0/4.0
Fundamentals:
All fundamentals based on 2007 annual report, and the latest market close share price of $64.85
| Measurement |
Value |
Score |
| Earnings per share (EPS): |
6.15 |
- |
| Is EPS growing: |
Yes |
0.5 |
| Net Profit Margin: |
0.2 |
- |
| Is Net Profit Margin growing: |
Yes |
0.5 |
| Price/Book Ratio (P/B) < 0.80: |
1.83 |
0 |
| Price/Earnings Ratio (P/E) <15: |
10.54 |
0.5 |
| Price/Sales Ratio (P/S) <1.5: |
2.12 |
0 |
| Is the Graham Number > stock price: |
$70.08 |
1 |
Score: 2.5/3.5
Technicals:
Chart Acquired at StockCharts.com
| Measurement |
Value |
Score |
| 200 day Simple Moving Average direction: |
Up |
0.5 |
| Indicators show a good time to buy (MACD, SSTOCH, RSI): |
Yes |
0.5 |
Score: 1.0/1.0
Total Score: 7.75/10
Summary:
This was a very close call, with Canadian Pacific Railway coming in with a score of 7.75 versus Canadian National Railway having a score of 7.0. The winner, largely in part because of its price selling below the Graham number, is Canadian Pacific Railway. Looking at this from a Value perspective I definitely would say that CP is the right choice, now, on the other hand my little dividend advisor is screaming out at me to go with CNR as a dividend based pick over CP. Why? well, mostly because it is a Dividend Achiever AND a Dividend aristocrat where CP is neither. In any case, I think if you go with either one, you are in a winning trade for the long term. But, I promised you a winner, so because numbers don't lie. Canadian Pacific Railway (TSE: CP) is our reigning railway champ!
Recommendation:BUY
Full Disclosure: I currently do NOT own shares in TSE: CP
Disclaimer: Any information contained in the above article represents my opinions only, and should not be construed as personalized investment advice. I cannot assess, verify or guarantee the suitability of any particular investment to any particular situation and the reader of the article bears complete responsibility for its own investment research and should seek the advice of a qualified investment professional that provides individualized advice prior to making any investment decisions. All opinions expressed and information and data provided therein are subject to change without notice.
