Here's Why Investors Should Retain Canadian Pacific Stock Now

Core Insights - Canadian Pacific Kansas City (CP) is experiencing operational efficiencies due to effective cost-cutting initiatives, although it faces economic uncertainties [1] Group 1: Factors Favoring CP - CP's proactive cost-cutting measures have led to a 1% year-over-year reduction in total operating expenses in Q4 2024 [2] - Compensation and benefits expenses, which constitute 26.8% of total operating expenses, decreased by 18% year-over-year [2] - Locomotive productivity increased by 1% year-over-year, and fuel efficiency improved by 2% compared to Q4 2023, indicating a commitment to operational excellence [2] Group 2: Safety Commitment - CP has made significant strides in safety, achieving a personal injury frequency rate of 0.84 in Q4 2024, down from 1.13 in the same period of 2023 [3] Group 3: Shareholder Returns - The company has shown financial confidence by increasing dividend payouts from C$507 million in 2021 to C$707 million in 2022 and 2023 [4] - In Q4 2024, CP paid out a total dividend of C$177 million, with a quarterly dividend of 19 cents per share [4] Group 4: Key Risks - CP is facing volume-related challenges, with U.S. coal volumes dropping by 8% year-over-year due to a specific customer outage [5] - The potash sector experienced a 7% year-over-year decline in volumes due to a strike and adverse weather conditions [5] - The Metals, Minerals, and Consumer Products sector saw a 5% year-over-year drop in volumes, attributed to softer demand and production issues at a customer's facility [6] Group 5: Stock Performance - CP's shares have declined by 11.9% over the past year, compared to an 11% decline in its industry [6]