North America - CP appears to be bouncing back.
 
In spite of ongoing supply chain issues, CP has reported second quarter revenue of $2.2 billion, up seven percent compared to the same quarter in 2021.
 
In a press release Thursday, CP president and CEO Keith Creel said he is confident the company will see momentum through the second half of 2022 given a "strong demand environment for North American goods and commodities."
 
CP's stock is trading at $100.78 per share as of Friday, indicating some recovery following a June dip to $87.50.
 
The company's stock is trading nearly 10 percent higher compared to July 2021.
 
The company still appears to be on track for its $31 billion (U.S.) takeover of Kansas City Southern, with Creel telling investors that the company is anticipating a decision on the takeover by the U.S. Surface Transportation Board (STB) in early 2023.
 
CP is aiming to create the first single-line rail network in North America, which would link Canada, the U.S., and Mexico.
 
According to analysis by Dejardins, the long-term prospects of the KCS acquisition could offset any revenue losses from continued supply chain disruptions.
 
Canadian National
 
CN's stock seems to be recovering after dropping to $143.20 per share in May.
 
Despite the tumble, the company's stock is still up approximately 19.10 percent compared to July 2021.
 
Revenue has risen roughly 21 percent year-over-year, according to CN's quarterly earnings report.
 
The company is reporting revenue of $4.3 billion this quarter, compared to $3.5 billion in the same period of 2021.
 
In a call to investors last week, CN president and CEO Tracy Robinson said the operating ratio for the quarter was 59 percent, an improvement of 260 basis points compared to the second quarter of 2021.
 
"The operating team has done a great job of improving performance," Robinson said.
 
Analysis firm Morningstar reports that CN's total carload volume for the quarter fell slightly short of their predictions, staying relatively flat compared to the same period in 2021.
 
However, Morningstar writes, volume is expected to grow, and analysts anticipate a strong rebound in the second half of the fiscal year.
 
The Bottom Line
 
Both companies appear to be recovering in spite of ongoing supply chain disruptions.
 
CP and CN are both showing significant second quarter revenue gains.
 
That said, CP's merger with KCS sets it apart from its competitor.
 
Similarly, the company has 809 hectares of vacant land capacity, meaning it is protected from possible backlog issues at Canadian ports, according to analysis by Desjardins.
 
Given the continued momentum with KCS, CP presents a marginally better investment opportunity following Q2.
 
Jenna Moon.