CP vs WAB

For growth investors, Westinghouse Air Brake Technologies Corporation (WAB) is the stronger pick with 7.

5% revenue growth year-over-year, versus 3. 7% for Canadian Pacific Kansas City Ltd. (CP). Canadian Pacific Kansas City Ltd. (CP) offers the better valuation at 25. 8x trailing P/E (22. 6x forward), making it the more compelling value choice. Analysts rate Canadian Pacific Kansas City Ltd. (CP) a "Buy" — based on 43 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, Canadian Pacific Kansas City Ltd.

(CP) is the cheapest at 25. 8x versus Westinghouse Air Brake Technologies Corporation at 38. 9x. On forward P/E, Canadian Pacific Kansas City Ltd. is actually cheaper at 22. 6x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Westinghouse Air Brake Technologies Corporation wins at 0. 97x versus Canadian Pacific Kansas City Ltd. 's 4. 84x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Westinghouse Air Brake Technologies Corporation (WAB) delivered a total return of +229.

0%, compared to +10. 8% for Canadian Pacific Kansas City Ltd. (CP). Over 10 years, the gap is even starker: WAB returned +247. 1% versus CP's +230. 2%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), Canadian Pacific Kansas City Ltd.

(CP) is the lower-risk stock at 0. 70β versus Westinghouse Air Brake Technologies Corporation's 1. 11β — meaning WAB is approximately 58% more volatile than CP relative to the S&P 500. On balance sheet safety, Westinghouse Air Brake Technologies Corporation (WAB) carries a lower debt/equity ratio of 50% versus 50% for Canadian Pacific Kansas City Ltd. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Westinghouse Air Brake Technologies Corporation (WAB) is pulling ahead at 7.

5% versus 3. 7% for Canadian Pacific Kansas City Ltd. (CP). On earnings-per-share growth, the picture is similar: Canadian Pacific Kansas City Ltd. grew EPS 13. 3% year-over-year, compared to 13. 1% for Westinghouse Air Brake Technologies Corporation. Over a 3-year CAGR, CP leads at 19. 6% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

Canadian Pacific Kansas City Ltd.

(CP) is the more profitable company, earning 27. 5% net margin versus 10. 5% for Westinghouse Air Brake Technologies Corporation — meaning it keeps 27. 5% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: CP leads at 37. 2% versus 16. 7% for WAB. At the gross margin level — before operating expenses — CP leads at 52. 2%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Westinghouse Air Brake Technologies Corporation (WAB) is the more undervalued stock at a PEG of 0. 97x versus Canadian Pacific Kansas City Ltd. 's 4. 84x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Canadian Pacific Kansas City Ltd. (CP) trades at 22. 6x forward P/E versus 25. 0x for Westinghouse Air Brake Technologies Corporation — 2. 4x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for WAB: 9. 5% to $291. 00.

All stocks in this comparison pay dividends.

Canadian Pacific Kansas City Ltd. (CP) offers the highest yield at 0. 7%, versus 0. 4% for Westinghouse Air Brake Technologies Corporation (WAB).

For long-horizon retirement investors, Canadian Pacific Kansas City Ltd.

(CP) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 70), 0. 7% yield, +230. 2% 10Y return). Both have compounded well over 10 years (CP: +230. 2%, WAB: +247. 1%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

Both stocks operate in the Industrials sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

CP pays a dividend while WAB does not, making them suitable for different income and tax situations. These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.