CANADIAN PACIFIC RAILWAY $127.99 - Toronto symbol CP

CANADIAN PACIFIC RAILWAY $127.99 (Toronto symbol CP; Shares outstanding: 174.7 million; Market cap: $22.6 billion; TSINetwork Rating: Average; Dividend yield: 1.1%; www.cpr.ca) continues to benefit from its aggressive plan to improve its efficiency with new locomotives, upgraded tracks and software that optimizes train loads and speeds.

For example, CP has cut the time it takes to ship intermodal containers between Toronto and Calgary by 20 hours. The trip now takes 64 hours.

Speeding up service will help CP attract more customers. It will also help it reach its goal of lowering its operating ratio from 75.8% in the first quarter of 2013 to around 65% by the middle of 2016. (Operating ratio is calculated by dividing a railway’s regular operating costs by its revenue. The lower the ratio, the better.)

CP Rail is a buy.

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