CANADIAN NATL RAILWAY CO (CNI) Stock Fundamental Analysis
NYSE:CNI - New York Stock Exchange, Inc. - CA1363751027 - Common Stock - Currency: USD
CNI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 39 industry peers in the Ground Transportation industry. While CNI has a great profitability rating, there are quite some concerns on its financial health. CNI is not valued too expensively and it also shows a decent growth rate. CNI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
CNI had positive earnings in the past year.
In the past year CNI had a positive cash flow from operations.
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 79.49% of its industry peers.
The Return On Equity of CNI (20.84%) is better than 79.49% of its industry peers.
CNI has a better Return On Invested Capital (9.67%) than 79.49% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CNI is above the industry average of 8.06%.
| 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
Looking at the Profit Margin, with a value of 26.20%, CNI belongs to the top of the industry, outperforming 89.74% of the companies in the same industry.
CNI's Profit Margin has declined in the last couple of years.
The Operating Margin of CNI (37.15%) is better than 94.87% of its industry peers.
In the last couple of years the Operating Margin of CNI has remained more or less at the same level.
CNI's Gross Margin of 74.52% is amongst the best of the industry. CNI outperforms 87.18% of its industry peers.
CNI's Gross Margin has been stable in the last couple of years.
| 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.
The number of shares outstanding for CNI has been reduced compared to 1 year ago.
CNI has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, CNI has a worse debt to assets ratio.
2.2 Solvency
CNI has an Altman-Z score of 2.62. This is not the best score and indicates that CNI is in the grey zone with still only limited risk for bankruptcy at the moment.
CNI has a Altman-Z score of 2.62. This is in the better half of the industry: CNI outperforms 61.54% of its industry peers.
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's Debt to FCF ratio of 6.39 is fine compared to the rest of the industry. CNI outperforms 74.36% of its industry peers.
A Debt/Equity ratio of 0.91 indicates that CNI is somewhat dependend on debt financing.
CNI has a worse Debt to Equity ratio (0.91) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.91 | ||
| Debt/FCF | 6.39 | ||
| Altman-Z | 2.62 |
ROIC/WACC1.18
WACC8.18%
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 Current ratio of 0.62. This is amonst the worse of the industry: CNI underperforms 94.87% 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.
Looking at the Quick ratio, with a value of 0.43, CNI is doing worse than 94.87% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.62 | ||
| Quick Ratio | 0.43 |
3. Growth
3.1 Past
CNI shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.56%.
The Earnings Per Share has been growing slightly by 4.09% on average over the past years.
Looking at the last year, CNI shows a small growth in Revenue. The Revenue has grown by 2.60% in the last year.
Measured over the past years, CNI shows a small growth in Revenue. The Revenue has been growing by 2.70% on average per year.
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 9.80% on average per year.
Based on estimates for the next years, CNI will show a small growth in Revenue. The Revenue will grow by 4.57% on average per year.
EPS Next Y12.34%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
EPS Next 5Y9.8%
Revenue Next Year3.57%
Revenue Next 2Y4.51%
Revenue Next 3Y4.85%
Revenue Next 5Y4.57%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
A Price/Earnings ratio of 20.02 indicates a rather expensive valuation of CNI.
74.36% of the companies in the same industry are more expensive than CNI, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of CNI to the average of the S&P500 Index (26.29), we can say CNI is valued slightly cheaper.
Based on the Price/Forward Earnings ratio of 16.24, the valuation of CNI can be described as correct.
Based on the Price/Forward Earnings ratio, CNI is valued a bit cheaper than 76.92% of the companies in the same industry.
CNI is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 22.17, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.02 | ||
| Fwd PE | 16.24 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CNI is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, CNI is valued a bit cheaper than the industry average as 76.92% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.97 | ||
| EV/EBITDA | 13.35 |
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)1.62
PEG (5Y)4.89
EPS Next 2Y12.06%
EPS Next 3Y11.89%
5. Dividend
5.1 Amount
CNI has a Yearly Dividend Yield of 2.45%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 1.58, CNI pays a better dividend. On top of this CNI pays more dividend than 100.00% of the companies listed in the same industry.
CNI's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
5.2 History
On average, the dividend of CNI grows each year by 9.39%, which is quite nice.
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.
CNI's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP47.83%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
104.89
-0.05 (-0.05%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners74.36%
Inst Owner Change0.27%
Ins Owners0.14%
Ins Owner ChangeN/A
Market Cap65.92B
Analysts72.67
Price Target123.19 (17.45%)
Short Float %0.31%
Short Ratio1.23
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.45% |
Yearly Dividend2.44
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)-0.74%
PT rev (3m)0.07%
EPS NQ rev (1m)-4.09%
EPS NQ rev (3m)-4.4%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.63%
Revenue NQ rev (1m)-2.42%
Revenue NQ rev (3m)-2.4%
Revenue NY rev (1m)-1.09%
Revenue NY rev (3m)-1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.02 | ||
| Fwd PE | 16.24 | ||
| P/S | 5.29 | ||
| P/FCF | 27.97 | ||
| P/OCF | 13.49 | ||
| P/B | 4.21 | ||
| P/tB | 4.21 | ||
| EV/EBITDA | 13.35 |
EPS(TTM)5.24
EY5%
EPS(NY)6.46
Fwd EY6.16%
FCF(TTM)3.75
FCFY3.58%
OCF(TTM)7.77
OCFY7.41%
SpS19.82
BVpS24.92
TBVpS24.92
PEG (NY)1.62
PEG (5Y)4.89
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 | 2.62 |
F-Score6
WACC8.18%
ROIC/WACC1.18
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 5Y9.8%
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 5Y4.57%
EBIT growth 1Y-1.42%
EBIT growth 3Y4.37%
EBIT growth 5Y2.49%
EBIT Next Year38.13%
EBIT Next 3Y16.47%
EBIT Next 5Y11.43%
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%