CANADIAN NATL RAILWAY CO (CNI) Stock Fundamental Analysis
NYSE:CNI - New York Stock Exchange, Inc. - CA1363751027 - Common Stock - Currency: USD
We assign a fundamental rating of 5 out of 10 to CNI. CNI was compared to 40 industry peers in the Ground Transportation industry. CNI has an excellent profitability rating, but there are concerns on its financial health. CNI has a decent growth rate and is not valued too expensively. CNI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year CNI was profitable.
CNI had a positive operating cash flow in the past year.
CNI had positive earnings in each of the past 5 years.
CNI had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
The Return On Assets of CNI (7.85%) is better than 77.50% of its industry peers.
CNI has a Return On Equity of 20.84%. This is in the better half of the industry: CNI outperforms 77.50% of its industry peers.
CNI has a Return On Invested Capital of 9.67%. This is in the better half of the industry: CNI outperforms 77.50% of its industry peers.
CNI had an Average Return On Invested Capital over the past 3 years of 10.70%. This is above the industry average of 8.58%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | 20.84% | ||
| ROIC | 9.67% |
ROA(3y)9.53%
ROA(5y)9.32%
ROE(3y)24.34%
ROE(5y)22.53%
ROIC(3y)10.7%
ROIC(5y)10.47%
1.3 Margins
The Profit Margin of CNI (26.20%) is better than 90.00% of its industry peers.
In the last couple of years the Profit Margin of CNI has declined.
CNI's Operating Margin of 37.15% is amongst the best of the industry. CNI outperforms 95.00% of its industry peers.
In the last couple of years the Operating Margin of CNI has remained more or less at the same level.
The Gross Margin of CNI (74.52%) is better than 87.50% of its industry peers.
In the last couple of years the Gross Margin of CNI has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 37.15% | ||
| PM (TTM) | 26.2% | ||
| GM | 74.52% |
OM growth 3Y-1.16%
OM growth 5Y-0.21%
PM growth 3Y-8.26%
PM growth 5Y-1.58%
GM growth 3Y-0.37%
GM growth 5Y0.14%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), CNI is creating some value.
Compared to 1 year ago, CNI has less shares outstanding
The number of shares outstanding for CNI has been reduced compared to 5 years ago.
Compared to 1 year ago, CNI has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.56 indicates that CNI is not a great score, but indicates only limited risk for bankruptcy at the moment.
The Altman-Z score of CNI (2.56) is comparable to the rest of the industry.
CNI has a debt to FCF ratio of 6.39. This is a slightly negative value and a sign of low solvency as CNI would need 6.39 years to pay back of all of its debts.
CNI has a Debt to FCF ratio of 6.39. This is in the better half of the industry: CNI outperforms 72.50% of its industry peers.
CNI has a Debt/Equity ratio of 0.91. This is a neutral value indicating CNI is somewhat dependend on debt financing.
CNI's Debt to Equity ratio of 0.91 is on the low side compared to the rest of the industry. CNI is outperformed by 65.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 6.39 | ||
| Altman-Z | 2.56 |
ROIC/WACC1.17
WACC8.29%
2.3 Liquidity
CNI has a Current Ratio of 0.62. This is a bad value and indicates that CNI is not financially healthy enough and could expect problems in meeting its short term obligations.
CNI has a worse Current ratio (0.62) than 95.00% of its industry peers.
CNI has a Quick Ratio of 0.62. This is a bad value and indicates that CNI is not financially healthy enough and could expect problems in meeting its short term obligations.
CNI's Quick ratio of 0.43 is on the low side compared to the rest of the industry. CNI is outperformed by 95.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.62 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.56% over the past year.
The Earnings Per Share has been growing slightly by 4.09% on average over the past years.
CNI shows a small growth in Revenue. In the last year, the Revenue has grown by 2.60%.
CNI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.70% yearly.
EPS 1Y (TTM)0.56%
EPS 3Y6.07%
EPS 5Y4.09%
EPS Q2Q%7.56%
Revenue 1Y (TTM)2.6%
Revenue growth 3Y5.6%
Revenue growth 5Y2.7%
Sales Q2Q%3.62%
3.2 Future
Based on estimates for the next years, CNI will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.92% on average per year.
CNI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.61% yearly.
EPS Next Y12.34%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
EPS Next 5Y9.92%
Revenue Next Year3.57%
Revenue Next 2Y4.51%
Revenue Next 3Y4.85%
Revenue Next 5Y4.61%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 19.27, the valuation of CNI can be described as rather expensive.
Compared to the rest of the industry, the Price/Earnings ratio of CNI indicates a somewhat cheap valuation: CNI is cheaper than 72.50% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of CNI to the average of the S&P500 Index (26.69), we can say CNI is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 15.61, the valuation of CNI can be described as correct.
Based on the Price/Forward Earnings ratio, CNI is valued a bit cheaper than 77.50% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.29. CNI is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.27 | ||
| Fwd PE | 15.61 |
4.2 Price Multiples
CNI's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CNI indicates a somewhat cheap valuation: CNI is cheaper than 80.00% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.89 | ||
| EV/EBITDA | 12.93 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CNI has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)1.56
PEG (5Y)4.71
EPS Next 2Y12.06%
EPS Next 3Y11.89%
5. Dividend
5.1 Amount
CNI has a Yearly Dividend Yield of 2.54%. Purely for dividend investing, there may be better candidates out there.
CNI's Dividend Yield is rather good when compared to the industry average which is at 1.57. CNI pays more dividend than 100.00% of the companies in the same industry.
CNI's Dividend Yield is comparable with the S&P500 average which is at 2.43.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
5.2 History
The dividend of CNI is nicely growing with an annual growth rate of 9.39%!
CNI has been paying a dividend for at least 10 years, so it has a reliable track record.
CNI has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.39%
Div Incr Years27
Div Non Decr Years27
5.3 Sustainability
CNI pays out 47.83% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of CNI is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP47.83%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
101.38
-0.74 (-0.72%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners74.62%
Inst Owner Change0.27%
Ins Owners0.17%
Ins Owner ChangeN/A
Market Cap63.72B
Analysts72.86
Price Target122.99 (21.32%)
Short Float %0.55%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.54% |
Yearly Dividend2.45
Dividend Growth(5Y)9.39%
DP47.83%
Div Incr Years27
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-2.76%
Min EPS beat(2)-8.25%
Max EPS beat(2)2.73%
EPS beat(4)1
Avg EPS beat(4)-3.08%
Min EPS beat(4)-8.25%
Max EPS beat(4)2.73%
EPS beat(8)2
Avg EPS beat(8)-2.51%
EPS beat(12)5
Avg EPS beat(12)-0.08%
EPS beat(16)7
Avg EPS beat(16)0.49%
Revenue beat(2)0
Avg Revenue beat(2)-1.37%
Min Revenue beat(2)-2.24%
Max Revenue beat(2)-0.5%
Revenue beat(4)0
Avg Revenue beat(4)-1.64%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)-0.5%
Revenue beat(8)1
Avg Revenue beat(8)-1.82%
Revenue beat(12)5
Avg Revenue beat(12)-0.35%
Revenue beat(16)7
Avg Revenue beat(16)-0.34%
PT rev (1m)-0.16%
PT rev (3m)1.66%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-4.6%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.63%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-2.55%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.27 | ||
| Fwd PE | 15.61 | ||
| P/S | 5.09 | ||
| P/FCF | 26.89 | ||
| P/OCF | 12.97 | ||
| P/B | 4.05 | ||
| P/tB | 4.05 | ||
| EV/EBITDA | 12.93 |
EPS(TTM)5.26
EY5.19%
EPS(NY)6.49
Fwd EY6.4%
FCF(TTM)3.77
FCFY3.72%
OCF(TTM)7.82
OCFY7.71%
SpS19.93
BVpS25.05
TBVpS25.05
PEG (NY)1.56
PEG (5Y)4.71
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.85% | ||
| ROE | 20.84% | ||
| ROCE | 12.03% | ||
| ROIC | 9.67% | ||
| ROICexc | 9.72% | ||
| ROICexgc | 9.72% | ||
| OM | 37.15% | ||
| PM (TTM) | 26.2% | ||
| GM | 74.52% | ||
| FCFM | 18.92% |
ROA(3y)9.53%
ROA(5y)9.32%
ROE(3y)24.34%
ROE(5y)22.53%
ROIC(3y)10.7%
ROIC(5y)10.47%
ROICexc(3y)10.79%
ROICexc(5y)10.58%
ROICexgc(3y)10.83%
ROICexgc(5y)10.63%
ROCE(3y)13.46%
ROCE(5y)13.06%
ROICexcg growth 3Y-1.67%
ROICexcg growth 5Y-2.97%
ROICexc growth 3Y-1.63%
ROICexc growth 5Y-2.93%
OM growth 3Y-1.16%
OM growth 5Y-0.21%
PM growth 3Y-8.26%
PM growth 5Y-1.58%
GM growth 3Y-0.37%
GM growth 5Y0.14%
F-Score6
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 6.39 | ||
| Debt/EBITDA | 2.36 | ||
| Cap/Depr | 181.59% | ||
| Cap/Sales | 20.3% | ||
| Interest Coverage | 6.69 | ||
| Cash Conversion | 81.16% | ||
| Profit Quality | 72.21% | ||
| Current Ratio | 0.62 | ||
| Quick Ratio | 0.43 | ||
| Altman-Z | 2.56 |
F-Score6
WACC8.29%
ROIC/WACC1.17
Cap/Depr(3y)174.01%
Cap/Depr(5y)176.62%
Cap/Sales(3y)18.61%
Cap/Sales(5y)19.3%
Profit Quality(3y)71.51%
Profit Quality(5y)78.12%
High Growth Momentum
Growth
EPS 1Y (TTM)0.56%
EPS 3Y6.07%
EPS 5Y4.09%
EPS Q2Q%7.56%
EPS Next Y12.34%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
EPS Next 5Y9.92%
Revenue 1Y (TTM)2.6%
Revenue growth 3Y5.6%
Revenue growth 5Y2.7%
Sales Q2Q%3.62%
Revenue Next Year3.57%
Revenue Next 2Y4.51%
Revenue Next 3Y4.85%
Revenue Next 5Y4.61%
EBIT growth 1Y-1.42%
EBIT growth 3Y4.37%
EBIT growth 5Y2.49%
EBIT Next Year38.13%
EBIT Next 3Y16.47%
EBIT Next 5Y11.92%
FCF growth 1Y-24.68%
FCF growth 3Y-8.26%
FCF growth 5Y8.89%
OCF growth 1Y-5.68%
OCF growth 3Y-1.32%
OCF growth 5Y2.49%