Based on the aggregated intelligence of 170,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, freight railroad operator Canadian Pacific Railway (NYSE: CP ) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Canadian Pacific's business and see what CAPS investors are saying about the stock right now.
Canadian Pacific facts
|Headquarters (founded)||Calgary, Canada (1881)|
|Market Cap||$10.96 billion|
|Trailing-12-Month Revenue||$4.62 billion|
CEO Frederic Green (since 2006)
CFO Kathryn McQuade (since 2008)
|Return on Equity (average, past 3 years)||11.6%|
|Cash/Debt||$261.7 million / $4.3 billion|
Canadian National Railway (NYSE: CNI )
Union Pacific (NYSE: UNP )
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
On CAPS, 92% of the 1,968 members who have rated Canadian Pacific believe the stock will outperform the S&P 500 going forward. These bulls include All-Star Capsperson, who is ranked in the top 0.5% of our community, and TonyTwoTimes.
Just a couple of months ago, Capsperson gave Fools some sense of direction: "Moves grain from Canadian breadbasket provinces to Pacific ports. Will be a major contributor to Canadian wheat exports. Great valuations."
While Canadian Pacific's operating metrics have historically been in line with the industry average, many Fools believe they have the most room to improve. Over the next five years, Canadian Pacific is even expected to grow its bottom line (17.6% per annum) at a faster rate than main foes Canadian National (14.3%) and Union Pacific (15.7%), as well as other railroad plays such as CSX (NYSE: CSX ) (13.4%) and Norfolk Southern (NYSE: NSC ) (12.7%).
CAPS member TonyTwoTimes elaborates on the bull case:
Railways have a huge advantage over trucks when it comes to moving freight because of increasing oil costs and environmental regulation. CP ships to Vancouver which is Canada's gateway to the Far East, which is going to be the engine of global economic growth for the next few decades.
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