CP is a Portfolio Cornerstone

Article Excerpt

CP Rail is down over 50% from the high of $90 it reached in 2007. Earnings were $4.32 a share that year and the stock yielded just 1.2%. The stock was probably overpriced at $90 and 20.8 times earnings, but it now trades at less than 10 times this year’s forecast earnings and has a yield of 2.3%. The stock could go lower, but we think the company will undoubtedly survive the economic downturn. Eventually CP will go on back to $90 and beyond. CANADIAN PACIFIC RAILWAY LTD. $44 (Toronto symbol CP; Shares outstanding: 153.8 million; Market cap: $6.8 billion; SI Rating: Average) transports freight over a rail network between Montreal and Vancouver. In the United States, subsidiaries connect CP Rail’s Canadian lines to major hubs in the Midwest and Northeast. Alliances with other railways extend its reach to Mexico. In the three months ended September 30, 2008, CP Rail’s earnings per share excluding one-time items fell 2.4%, to $1.20 from $1.23….