CANADIAN NATL RAILWAY CO (CNI)
CA1363751027 - Common Stock
We assign a fundamental rating of 6 out of 10 to CNI. CNI was compared to 36 industry peers in the Ground Transportation industry. CNI scores excellent on profitability, but there are some minor concerns on its financial health. CNI has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year CNI was profitable.
CNI had a positive operating cash flow in the past year.
Each year in the past 5 years CNI has been profitable.
Each year in the past 5 years CNI had a positive operating cash flow.
1.2 Ratios
CNI has a better Return On Assets (10.68%) than 91.67% of its industry peers.
CNI has a Return On Equity of 27.96%. This is amongst the best in the industry. CNI outperforms 91.67% of its industry peers.
CNI's Return On Invested Capital of 10.84% is amongst the best of the industry. CNI outperforms 86.11% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CNI is above the industry average of 7.88%.
The last Return On Invested Capital (10.84%) for CNI is above the 3 year average (10.80%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.68% | ||
| ROE | 27.96% | ||
| ROIC | 10.84% |
ROA(3y)10.29%
ROA(5y)9.69%
ROE(3y)24.47%
ROE(5y)22.98%
ROIC(3y)10.8%
ROIC(5y)10.76%
1.3 Margins
Looking at the Profit Margin, with a value of 33.43%, CNI belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Profit Margin of CNI has grown nicely.
CNI's Operating Margin of 39.20% is amongst the best of the industry. CNI outperforms 100.00% of its industry peers.
In the last couple of years the Operating Margin of CNI has remained more or less at the same level.
CNI has a better Gross Margin (74.14%) than 80.56% 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 | 39.2% | ||
| PM (TTM) | 33.43% | ||
| GM | 74.14% |
OM growth 3Y0.97%
OM growth 5Y0.44%
PM growth 3Y9.05%
PM growth 5Y2.04%
GM growth 3Y-0.86%
GM growth 5Y0%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CNI is still creating some value.
CNI has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, CNI has less shares outstanding
The debt/assets ratio for CNI is higher compared to a year ago.
2.2 Solvency
CNI has an Altman-Z score of 3.26. This indicates that CNI is financially healthy and has little risk of bankruptcy at the moment.
CNI has a Altman-Z score of 3.26. This is in the better half of the industry: CNI outperforms 66.67% of its industry peers.
The Debt to FCF ratio of CNI is 4.89, which is a neutral value as it means it would take CNI, 4.89 years of fcf income to pay off all of its debts.
CNI has a Debt to FCF ratio of 4.89. This is amongst the best in the industry. CNI outperforms 80.56% of its industry peers.
A Debt/Equity ratio of 0.89 indicates that CNI is somewhat dependend on debt financing.
The Debt to Equity ratio of CNI (0.89) is worse than 61.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | 4.89 | ||
| Altman-Z | 3.26 |
ROIC/WACC1.44
WACC7.52%
2.3 Liquidity
CNI has a Current Ratio of 0.61. 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 (0.61) than 86.11% of its industry peers.
CNI has a Quick Ratio of 0.61. 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 Quick ratio of 0.47. This is amonst the worse of the industry: CNI underperforms 86.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.47 |
3. Growth
3.1 Past
The earnings per share for CNI have decreased by -2.54% in the last year.
Measured over the past 5 years, CNI shows a small growth in Earnings Per Share. The EPS has been growing by 5.80% on average per year.
CNI shows a decrease in Revenue. In the last year, the revenue decreased by -1.63%.
CNI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.28% yearly.
EPS 1Y (TTM)-2.54%
EPS 3Y11.14%
EPS 5Y5.8%
EPS growth Q2Q-3.81%
Revenue 1Y (TTM)-1.63%
Revenue growth 3Y6.79%
Revenue growth 5Y3.28%
Revenue growth Q2Q-1.56%
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 10.67% on average per year.
Based on estimates for the next years, CNI will show a small growth in Revenue. The Revenue will grow by 5.57% on average per year.
EPS Next Y11.06%
EPS Next 2Y12%
EPS Next 3Y11.49%
EPS Next 5Y10.67%
Revenue Next Year6.34%
Revenue Next 2Y6.08%
Revenue Next 3Y5.81%
Revenue Next 5Y5.57%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
CNI is valuated rather expensively with a Price/Earnings ratio of 24.16.
The rest of the industry has a similar Price/Earnings ratio as CNI.
When comparing the Price/Earnings ratio of CNI to the average of the S&P500 Index (24.83), we can say CNI is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 21.76, the valuation of CNI can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as CNI.
CNI's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.16 | ||
| Fwd PE | 21.76 |
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.
83.33% of the companies in the same industry are more expensive than CNI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 29.87 | ||
| EV/EBITDA | 15.28 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of CNI may justify a higher PE ratio.
PEG (NY)2.18
PEG (5Y)4.17
EPS Next 2Y12%
EPS Next 3Y11.49%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.91%, CNI has a reasonable but not impressive dividend return.
CNI's Dividend Yield is rather good when compared to the industry average which is at 1.66. CNI pays more dividend than 88.89% of the companies in the same industry.
CNI's Dividend Yield is slightly below the S&P500 average, which is at 2.39.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
5.2 History
On average, the dividend of CNI grows each year by 11.66%, 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)11.66%
Div Incr Years17
Div Non Decr Years17
5.3 Sustainability
36.82% of the earnings are spent on dividend by CNI. This is a low number and sustainable payout ratio.
CNI's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP36.82%
EPS Next 2Y12%
EPS Next 3Y11.49%
CANADIAN NATL RAILWAY CO
NYSE:CNI (4/18/2024, 9:53:48 AM)
127.55
+0.52 (+0.41%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap81.72B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
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EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.16 | ||
| Fwd PE | 21.76 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)2.18
PEG (5Y)4.17
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 10.68% | ||
| ROE | 27.96% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 39.2% | ||
| PM (TTM) | 33.43% | ||
| GM | 74.14% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.32
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.89 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.61 | ||
| Quick Ratio | 0.47 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-2.54%
EPS 3Y11.14%
EPS 5Y
EPS growth Q2Q
EPS Next Y11.06%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-1.63%
Revenue growth 3Y6.79%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y