CANADIAN PACIFIC RAILWAY $164.15 - Toronto symbol CP

CANADIAN PACIFIC RAILWAY $164.15 (Toronto symbol CP; Shares outstanding: 175.2 million; Market cap: $28.8 billion; TSINetwork Rating: Average; Dividend yield: 0.9%; www.cpr.ca) transports freight between Montreal and Vancouver and connects with hubs in the U.S. Midwest and northeast.

CP continues to benefit from its plan to improve its efficiency with new locomotives, better tracks and software that optimizes train loads and speeds. That’s helping it deal with colder-than-normal winter weather.

In the three months ended December 31, 2013, CP’s earnings per share rose 49.2%, to $1.91 from $1.28. Revenue gained 7.0%, to a record $1.6 billion from $1.5 billion.

The company’s operating ratio improved to 65.9% from 74.8% a year ago. (Operating ratio is calculated by dividing regular operating costs by revenue. The lower the ratio, the better.) CP now feels it can cut its full-year operating ratio to 65% or lower in 2014.

CP Rail is a buy.

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