If I could hold only one stock in my Tax-Free Savings Account (TFSA) for the next 20 years, it would be Canadian Pacific Kansas City (TSX:CP).
CPKC is the only railway on the continent that physically connects Canada, the United States, and Mexico on a single network. Armed with a structural competitive moat that is almost impossible to replicate, CPKC is a blue-chip dividend stock that should be part of a diversified TFSA portfolio.
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A network built for the long game
To understand why CPKC is a forever hold, you need to understand what the 2023 merger between Canadian Pacific and Kansas City Southern created.
Before the deal, CP was a strong Canadian railway with a network that stopped at the U.S. border. Kansas City Southern’s network started there and ran deep into Mexico. Put the two together, and you get something that’s never existed before: a single railroad connecting Calgary to Mexico City.
CEO Keith Creel explained the industrial logic plainly at the JPMorgan Industrials Conference on March 18, 2026. “We came together to drive growth and to connect these three nations uniquely,” he said. “We’ve continued to enjoy growth in the industry, which is unique in this macro environment — and that’s been enabled by this new network.”
By the end of 2025, CPKC had generated over $1.2 billion in new revenue synergies directly enabled by the merger. Creel expects to post $200 million in cost savings this year, easily outpacing the original synergy target of $1 billion.
A top TSX stock to own in a TFSA
In 2025, tariffs on steel, aluminum, and automotive goods created roughly a $200 million revenue headwind. Trade uncertainty between Canada, the U.S., and Mexico weighed on shipper decisions. And, like every railroad, CPKC had to deal with winter weather and tough year-over-year comparisons due to tariff-related pull-forward demand in early 2025.
None of it broke the growth story.
- Grain volumes surged in early 2026, driven by a record Canadian harvest of 85 million metric tonnes — about 23% more than the prior year.
- International intermodal demand continued to grow as CPKC aligned with the Gemini Alliance, a partnership between shipping giants Maersk and Hapag-Lloyd.
- Automotive volumes hit records for the second consecutive year despite a shrinking overall market.
And the railroad giant is on track to meet its full-year guidance of low-single-digit revenue tonne-mile growth, translating into double-digit adjusted earnings per share growth, amid a challenging macro environment.
One of the most exciting and underappreciated growth drivers is what CPKC calls the land bridge: direct rail connections between Canada and Mexico that bypass the U.S. entirely for certain trade flows.
Canada-Mexico traffic grew from about 2% of CPKC’s revenue in 2024 to over 3% in 2025, representing nearly half a billion Canadian dollars in new revenue over two years. Creel sees another $100 million coming in 2026.
As Canada and Mexico look to diversify trade relationships amid ongoing uncertainty around the USMCA (United States–Mexico–Canada Agreement), CPKC’s north-south spine becomes strategically valuable.
Add the Southeast Mexico Express, a new service connecting Atlanta to Monterrey in about three days, and the Americold cold storage partnership in Kansas City ramping toward 600 weekly loads of proteins heading south into Mexico, and the pipeline of growth becomes almost impossible to ignore.
The Foolish takeaway
A $10,000 investment in CPKC stock 10 years back would be worth close to $33,000 today, if we adjust for dividend reinvestments.
Owning CPKC in a TFSA means that every dividend payment and every dollar of capital appreciation compounds completely tax-free. For a company aiming to achieve double-digit earnings growth over multiple years, the compounding effect within a sheltered account can be substantial.
