CP Or CNI: Which Railroad Is A Better Investment Pick Now?
Zacks Investment Research | Aug 28, 2019 10:06PM ET
Although railroad players in the United States are facing tough times coping with sluggish freight demand, their Canadian counterparts have largely remained unaffected, courtesy of robust freight demand in the country. With railroad participants deriving maximum revenues from transporting freight, an impressive freight demand is certainly a major catalyst for their growth.
The precision scheduled railroading model has become a rage in the industry with most major railroad players having already transformed into this business model. By reducing costs and optimally utilizing assets, the operating model is enabling individual companies to improve their operating ratio (operating expenses as a percentage of revenues), a key measure of efficiency, and thus boost profits. A few prominent players to have adopted this model are CSX Corporation (NASDAQ:CSX) , Union Pacific Corporation (NYSE:UNP) , Canadian Pacific Railway Limited (NYSE:CP) and Canadian National Railway Company (NYSE:CNI) .
Given this backdrop and stable economic conditions in Canada, let’s draw a comparison between two of the major Canadian railroads — Canadian Pacific and Canadian National — on the basis of a few important parameters. With both companies carrying a Zacks Rank #2 (Buy), let’s find out which of these is a better investment option. You can see Original post
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