CP Rail stock declines despite Q3 profit. An undervalued stock to buy?

Highlights

  • Canadian Pacific is a leading transportation and supply chain services provider in Canada.
  • Canadian Pacific Railway's total revenues increased by four per cent year-over-year (YoY) to C$ 1.94 billion.
  • CP shares surged relatively by about three per cent year-to-date (YTD). 

Stocks of Canadian Pacific Railway Limited (TSX:CP) declined by 0.4 per cent at market open despite the company announcing that it earned C$ 472 million in the third quarter of fiscal 2021.

Although the company posted a profit in Q3 2021, it was down from C$ 598 million in Q3 2020, and investors are probably responding negatively due to this decline. 

Canadian Pacific is a leading transportation and supply chain services provider in Canada and operates on 12,500 miles of track across Canada and some parts of the United States.

On that note, we will explore more about the financial and stock performance of the railway company and find out if it is worth your money or not: 

Canadian Pacific Railway's (TSX:CP) stock and financial performance

Canadian Pacific Railway's total revenues increased by four per cent year-over-year (YoY) to C$ 1.94 billion, and it now expects low single-digit volume growth in 2021.

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The volume is measured in revenue ton-miles, and the company had said in July that it would achieve high single-digit growth.  

However, the Canadian railway services provider remains confident that it will deliver full-year adjusted diluted earnings per share in double digits in 2021. 

Canadian Pacific Railway Limited

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The Board of Directors has declared that the company would pay a quarterly dividend of C$ 0.19 per unit to the shareholders and be payable on January 31, 2022. 

In terms of stock performance, CP shares outpaced the Toronto Stock Exchange 300 Composite Index since the beginning of this year. CP shares surged relatively by about three per cent year-to-date (YTD), and the index declined by around 15 per cent in comparison. 

Bottom line

CP stock seems to be undervalued at the moment as it was trading 9.5 per cent lower than its 52-week high. On June 2, 2021, CP stock clocked a 52-week high of C$ 100 per share. 

The CP shares surged by 7.5 per cent in the last twelve months and 9.3 per cent quarter-to-date (QTD). Interested investors could consider this stock as the overall financial, and the company's stock performance looks positive.


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