Canadian Retirees: 1 Safe Dividend Income Stock to Buy and Hold Forever

Canadian Pacific Railway Ltd. (TSX:CP)(NYSE:CP) employs best practices, proven technologies, and safe operating standards for activities involving elevated environmental risk.

Canadian Pacific Railway (TSX: CP)(NYSE: CP) is railway freight transportation company. The company, known as CP, adopts a variety of business strategies to grow intrinsic value. These include implementing measures to minimize or prevent environmental impacts from CP’s operations and facilities and to ensure compliance with applicable environmental laws and regulations.

Reducing environmental risk

Further, the company maintains an environmental management system to provide consistent, effective guidance and resources to CP employees in regards to the management of air emissions, dangerous goods and waste materials, emergency preparedness and response, petroleum products management, and water and wastewater systems. The company also reduces environmental and safety risk through business processes to identify and mitigate potential environmental impacts related to all CP operations and activities.

Also, the company ensures that new or altered operations and other business activities are evaluated, planned, permitted in accordance with applicable regulations, and executed to mitigate environmental risk. CP engages with relevant stakeholders to consider and discuss the company’s environmental management practices and environmental issues and concerns associated with CP’s operations.

Safe operating standards

In addition, CP employs best practices, proven technologies, and safe operating standards for activities involving elevated environmental risk. It plans and prepares for emergency responses to ensure all appropriate steps are taken in the event of a derailment, spill, or other incident involving a release to the environment.

CP employs a fuel cost-adjustment program designed to respond to fluctuations in fuel prices and help reduce volatility to changing fuel prices. The company earns fuel surcharge revenues on individual shipments and are based primarily on the price of on-highway diesel. As such, fuel surcharge revenues are a function of freight volumes and fuel prices.

Diverse revenue sources

Fuel surcharge revenues accounted for sizeable percentage of the company’s freight revenues in 2020. The company is also subject to carbon taxation systems and levies in some jurisdictions in which it operates, the costs of which are passed on to the shipper. As such, fuel surcharge revenue includes carbon taxes and levy recoveries. Fuel surcharge revenues decreased year over year due to lower fuel prices. This decrease was partially offset by the timing of recoveries from CP’s fuel cost-adjustment program and increased carbon tax recoveries.

Also, non-freight revenues have been increasing annually at CP. Non-freight revenues are generated from leasing certain assets and other arrangements, including logistical services and contracts with passenger service operators, and switching fees.

Mitigating measures

The company’s operations and real estate assets are subject to extensive federal, provincial, state, and local environmental laws and regulations governing emissions to the air. In addition, in operating a railway, it is possible that releases of hazardous materials during derailments or other accidents may occur that could cause harm to human health or to the environment.

CP is well aware of the costs of remediation, damages, and changes in regulations could materially affect the company’s operating results, financial condition, and reputation. Several mitigating measures are in place to reduce risk at CP, which should help the stock price over the long term.

The Motley Fool has no position in any of the stocks mentioned. Fool contributor Nikhil Kumar has no position in any of the stocks mentioned. 

More on Dividend Stocks

horses compete to win race
Dividend Stocks

Telecoms Were Monday’s Worst TSX Sector: This One Yields 4.5%

Rogers offers a meaningful dividend yield, with debt reduction providing the clearest test of the investment case.

Read more »

Blocks conceptualizing the Registered Retirement Savings Plan
Dividend Stocks

Which Account Should You Fill First for Retirement?

Not sure whether to fund your TFSA, RRSP or FHSA first? Here's a simple order for Canadians, plus how a…

Read more »

A woman shops in a grocery store while pushing a stroller with a child
Dividend Stocks

An Ideal TFSA Stock for Retirees, Paying 5.2% Each Month

Here's why this popular Canadian real estate stock is one of the best picks for retirees inside their TFSAs.

Read more »

Hand Protecting Senior Couple
Dividend Stocks

A 4.8% Dividend Stock for Monthly Retirement Income

Sienna Senior Living pays $0.08 a share every month, about a 4.8% yield. See Q2 2026 growth, payout safety and…

Read more »

woman relaxes with phone
Dividend Stocks

BCE Earnings Preview: Is the Dividend Still the Main Event?

BCE’s Q3 2026 results will reveal whether its shift from dividend growth to debt reduction is delivering meaningful financial progress.

Read more »

A close up color image of a small green plant sprouting out of a pile of Canadian dollar coins "loonies."
Dividend Stocks

This 2% Monthly Payer Is the One Stock I’d Never Sell

Supported by strong fundamentals, favourable industry tailwinds, and promising growth prospects, Savaria offers long-term investors the potential for capital appreciation…

Read more »

woman looks at iPhone
Dividend Stocks

Is Telus’s New Dividend Safe? What $10,000 Would Earn You Today

Here’s why Telus’s new dividend looks more sustainable and why the cut could make the stock a better long-term investment.

Read more »

A glass jar resting on its side with Canadian banknotes and change inside.
Dividend Stocks

How Much Emergency Money Do Canadians Actually Need?

Generally, aim for 3–6 months of essential living expenses for your emergency money. For those with more variability in their…

Read more »