uploads/2018/03/Image-3.png

Canadian Pacific Declares a 1Q18 Dividend: A Look Back

By

Updated

1Q18 dividend

On February 15, 2018, Canadian Pacific Railway (CP), a Canadian-based US Class I railroad (XTN) company, announced a cash dividend of 0.56 Canadian dollars per share on its outstanding equity stock.

The dividend will payable on April 30, 2018, to shareowners of record at the close of business on March 23, 2018. The company’s dividend is an eligible dividend for the purposes of Canada’s Income Tax Act and any similar provincial legislation.

Article continues below advertisement

CP’s dividend history

If we annualize the quarterly dividend of 0.56 Canadian dollars per share, then CP’s annual dividend remains the same for 2017 and 2018. However, with the passage of the Tax Cuts and Jobs Act, the dividend could rise in the coming quarters due to lower taxes. The company’s yearly per-share dividend remained the same for the three consecutive years ended in 2015.

Canadian Pacific Railway’s quarterly cash dividend was raised to 0.50 Canadian dollars per share in 2Q16 from 0.35 Canadian dollars per share. In 2Q17, CP increased its dividend to 0.56 from 0.50 Canadian dollars per share. Canadian Pacific Railway maintained a stable dividend of 0.35 Canadian dollars per share from 2Q12 to 1Q16.

Peer group’s dividend payments

In 2017, Canadian Pacific’s arch-rival Canadian National Railway (CNI) paid an equity dividend of 1.24 billion Canadian dollars, a rise of 7% compared to 1.16 billion Canadian dollars. Union Pacific (UNP) paid $1.98 billion in dividends in the same year, which was 5.5% higher than its dividend of $1.88 billion in 2016. Kansas City Southern’s (KSU) total cash equity dividend in 2017 amounted to $142.5 million, down 0.2% from $142.7 million in the previous year.

Eastern US railroad major CSX (CSX) shelled out $708.0 million in cash equity dividends in 2017. Compared to 2016’s dividend payment of $680.0 million, this translated to a 4.1% rise year-over-year. CSX’s competitor Norfolk Southern (NSC) spent $703.0 million in the form of equity dividends last year compared to $695.0 million in 2016, indicating a yearly rise of 1.2%.

This short series on Canadian Pacific Railway’s quarterly dividend covers the company’s dividend payout, dividend yield, and growth. In the end, we’ll compare the returns generated by CP and its peers.

Advertisement

More From Market Realist