CP tackles its backlog

Article Excerpt

CANADIAN PACIFIC RAILWAY $237.69 (Toronto symbol CP; shares o/s: 147.7 million; Market cap: $34.0 billion; TSINetwork Rating: Above Average; Divd. yield: 1.1%; www.cpr.ca) should benefit from new federal regulations meant to encourage rail operators to refurbish Canada’s fleet of grain railcars (called “hoppers”). While the government will continue to own existing cars, under the new rules, an operator will receive full credit for any investments it makes to maintain, improve or replace cars. Currently, a railway must share credits for any work it does with its competitors. CP has already started to take advantage of the new rules with a plan underway to spend $500 million on new hoppers. That should help prevent problems it has had maintaining its grain delivery schedule and avoiding backlogs. CP Rail is a buy. buy…