Some may not necessarily classify Canadian Pacific Railroad (TSX:CP)(NYSE:CP) as value pick. The company’s valuation remains somewhat elevated when compared to historical levels.
However, I do see value with this company for a number of reasons. In this article, I’m going to discuss the bull case for owning CP for the long-term.
CP Rail is an advantageous stock to own for long-term investors due mainly to the nature of its business. As one of two Canadian railroads, CP’s status as a duopoly play gives this company a level of pricing power few others have in any sector.
With the total amount of railroad unlikely to change in any material way, owning rail that has been laid is an investment in a fixed asset which cannot be replicated or easily replaced. Rail contuse to be the "greenest" way to transport commodities long distances, another key driver for CP’s statues as a great long-term option.
CP is among the most efficient railroads in North America, due in part to some of the processes put in place at CP during Hunter Harrison’s reign as CEO. With a long history of cash flow and dividend growth, and a long future of similar growth ahead, there are few reasons not to own this long-term gem of a Canadian stock.
Invest wisely, my friends.
