Canadian Pacific Kansas City Boosts Dividend by 20% Amid Long-Term Growth Strategy

• CPKC raised its quarterly dividend to $0.228 per share, a 20% increase that signals confidence in its financial strength.
• The railway posted a 26% profit margin over the last 12 months, with $3.9 billion in earnings on $14.8 billion in revenue.
• While shares have been flat in 2025, the stock has climbed 66% over the past five years, reflecting long-term resilience.

Dividend Hike Reflects Strength and Stability

Canadian Pacific Kansas City Limited (TSX:CP)(NYSE:CP) gave dividend-focused investors something to cheer about recently with a 20% increase to its quarterly payout. Effective April 29, the dividend rises from $0.19 to $0.228 per share, translating to $0.912 annually and a forward yield of approximately 0.9%. The move reflects strong underlying financials and a positive long-term outlook for the North American railway operator.

Strong Profitability and Reasonable Valuation

CPKC has delivered solid financial performance, reporting $3.9 billion in earnings on $14.8 billion in revenue over the trailing 12 months—an impressive 26% profit margin. Trading at 25 times trailing earnings, the stock isn’t cheap, but remains reasonably priced given its dominant position as the only transnational railway connecting Canada, the U.S., and Mexico. The company stands to benefit from long-term continental trade growth, particularly as supply chains continue to shift and regional integration deepens.

For 2025, the company is projecting that its adjusted diluted earnings per share will rise between 10% and 14%. This outlook accounts for the current trade and tariff uncertainty.

Steady in a Volatile Market

Year-to-date, shares have been relatively flat, underperforming in a volatile market marked by trade tensions and recession fears. However, the stock’s long-term record is far more compelling: a 66% gain over the past five years underscores its reliability and investor appeal during periods of uncertainty.

With a growing dividend, robust profitability, and a strategic rail network spanning three countries, CPKC appeals to long-term, conservative investors seeking both income and capital appreciation. It’s a strong candidate for dividend-focused portfolios looking for stability and exposure to North American infrastructure growth.