CANADIAN PACIFIC RAILWAY LTD. $199.75 - Toronto symbol CP

CANADIAN PACIFIC RAILWAY LTD. $199.75 (Toronto symbol CP; Shares outstanding: 161.0 million; Market cap: $31.3 billion; TSINetwork Rating: Above Average; Dividend yield: 0.7%; www.cpr.ca) prefers to use its excess cash to buy back shares instead of raising its $1.40- a-share dividend, which yields 0.7%. That’s because many of its investors live in the U.S. and are subject to withholding taxes on dividends from Canadian firms.

The company could repurchase up to 9.1 million shares under its latest authorization, and it’s now closing in on that limit, so CP has raised it to 11.9 million shares, or 7% of the 161.0 million outstanding as of June 30, 2015.

The company expects to complete these purchases by March 17, 2016.

CP Rail is a buy.

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