Canadian Pacific Rail (CP.TO)

Yes, and certainly on any pullback. Great company. Merger will benefit in the long run, synergies haven't started yet. Those new assets are why he prefers it to CNR. Long term, it will be one of the best railroads you can own.

It's still in an uptrend though there's been some consolidating. It has to take out the high of late 2022 before you buy. The chart isn't bad.

He likes the oligopoly-type names with few competitors. #2 market cap in the industry. Robust network connecting key markets. Acquisition lets them grow further. Strong management, highly committed to profitability. Steady margin improvement. Rising demand for freight services. Slow and steady, outperformed the TSX for decades. Yield is 0.68%.

It is doing well. The Kansas City acquisition was expensive, He prefers CN which has a lower valuation and more upside over the 2 to 3 years.

Attractive industry with strong, defensive attributes. Coming into a time when there's potential for the economy to weaken, with a big impact on the rails. His preference in the space because of footprint and recent acquisition. Very attractive. Long term, onshoring is a benefit. Well run. Wait, buy on pullback.

Very strong company with duopoly business model.
High value infrastructure assets.
Has outperformed S&P 500 index.
Excellent company to own long term.

PE ratios are too close to call. Yield on CNR is about 2%, versus 1% for CP. No one's going to buy it for income. Looking at the FMV, the stock prices are so close for each, you really can't judge. 

Big difference is the book value. CP looks so cheap on price to book because of accounting decisions on its Kansas City purchase. So he can't tell if that's real or not. When he looks at CNR's SVA chart, it has an easy downside in weak markets to about $116. That's not trivial. 

Dead heat on a merry-go-round. Neither is reasonably attractive right now.

Would buy neither. We're heading into a recession or slowdown later this or next year. Neither stock will do if this happens. But if you're bullish about the economy, the rails will do well and CP will do better because of the Kansas expansion.

Very valuable acquisition over the long term. May take a while to realize the synergies, but they'll get there. Future acquisitions will be difficult for all rails, so this one was very timely. Can't replicate those assets. Can now service Canada, US, and Mexico directly. Will benefit from onshoring. Yield is 0.74%.

Wait to buy when recession hits bottom.
Good company, but not at this price.
Expecting better time to purchase shares. 

Good long term investment. 
Post merger with Southern Pacific - company in a good spot.
Only railroad that connects USA/Canada/Mexico.
Strong legacy assets (hard to replicate).
Backbone of North American economy. 

Valuations are similar. CNR 200-day MA roughly sideways, the stock price is above that, average type of returns. CP's chart is fairly similar, but trending upwards a bit more. CP looks slightly better on technicals, so that's his choice.

Rail business in Canada is wonderful, much of it due to barriers to entry. Blue chip. Its transportation can't be outsourced the way manufacturing can. Acquisition has given it a more impressive footprint than CNR. CNR has a more attractive multiple. Both are good, high quality companies.

Rails are economically sensitive, so volumes will decline in a downturn. The merger with Kansas City was good, because it opens new markets for CP. Great synergies worth $200 million annually. But the rails are too expensive now. 

Likes the merger. Approval last month means it can pursue sizable synergies. Rails have all re-rated higher on improving margins and efficiencies. At 20x, trades at a premium to the group, but it's justified. Essential infrastructure, so performs well in a slowing economy.