Canadian Pacific Railway (CP) has been on the rise since its double bottom in October last year, and shares recently hit the highest price the company has had since at least 2008, and possibly ever in the company’s history. What investors are wondering is if this trend will hold, and if so, for how long.
The company has been doing so well; in fact, that it just announced a quarterly dividend of $0.30, with a 1.6% yield on outstanding common shares. To me, the dividend is a sign that CP is confident in its future financial stability, since it can generate enough cash flow to pay out this dividend.
CP also just handed out a grant to the University of Alberta and Montana State University to carry out research into bear protection. I take this as another sign of financial confidence and stability. The people at CP are acting like they know that their company is comfortable and they appear to be implying that they have enough money coming in that they can give some away to a good cause.
With sunny skies on all horizons, is there any need for concern? A lot of major shareholders are putting pressure on the company to cut costs wherever possible, so the people in charge decided that it might be a good idea to change employees’ pension plans to make the much less secure. Unsurprisingly, workers are not happy with this, and the union has been up in arms to hold onto its rights. To continue reading, click here.