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. While CNI has a great profitability rating, there are quite some concerns on its financial health. CNI has a correct valuation and a medium 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
Looking at the Return On Assets, with a value of 8.04%, CNI is in the better half of the industry, outperforming 77.50% of the companies in the same industry.
CNI has a Return On Equity of 21.19%. This is amongst the best in the industry. CNI outperforms 82.50% of its industry peers.
CNI has a Return On Invested Capital of 9.76%. This is in the better half of the industry: CNI outperforms 80.00% of its industry peers.
The Average Return On Invested Capital over the past 3 years for CNI is above the industry average of 8.54%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.04% | ||
| ROE | 21.19% | ||
| ROIC | 9.76% |
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
CNI's Profit Margin of 26.62% is amongst the best of the industry. CNI outperforms 90.00% of its industry peers.
In the last couple of years the Profit Margin of CNI has declined.
The Operating Margin of CNI (37.28%) is better than 95.00% of its industry peers.
CNI's Operating Margin has been stable in the last couple of years.
CNI has a better Gross Margin (75.22%) 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 | 37.28% | ||
| PM (TTM) | 26.62% | ||
| GM | 75.22% |
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
CNI has an Altman-Z score of 2.48. 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's Altman-Z score of 2.48 is fine compared to the rest of the industry. CNI outperforms 62.50% of its industry peers.
The Debt to FCF ratio of CNI is 6.32, which is on the high side as it means it would take CNI, 6.32 years of fcf income to pay off all of its debts.
CNI has a better Debt to FCF ratio (6.32) than 72.50% of its industry peers.
A Debt/Equity ratio of 0.90 indicates that CNI is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.90, CNI is doing worse than 65.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.9 | ||
| Debt/FCF | 6.32 | ||
| Altman-Z | 2.48 |
ROIC/WACC1.23
WACC7.95%
2.3 Liquidity
CNI has a Current Ratio of 0.82. This is a bad value and indicates that CNI is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of CNI (0.82) is worse than 70.00% of its industry peers.
CNI has a Quick Ratio of 0.82. This is a bad value and indicates that CNI is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of CNI (0.58) is worse than 92.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.58 |
3. Growth
3.1 Past
CNI shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.14%.
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 0.63%.
The Revenue has been growing slightly by 2.70% on average over the past years.
EPS 1Y (TTM)-0.14%
EPS 3Y6.07%
EPS 5Y4.09%
EPS Q2Q%1.63%
Revenue 1Y (TTM)0.63%
Revenue growth 3Y5.6%
Revenue growth 5Y2.7%
Sales Q2Q%-1.32%
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 10.10% on average per year.
Based on estimates for the next years, CNI will show a small growth in Revenue. The Revenue will grow by 4.74% on average per year.
EPS Next Y12.34%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
EPS Next 5Y10.1%
Revenue Next Year1.61%
Revenue Next 2Y3.1%
Revenue Next 3Y3.62%
Revenue Next 5Y4.74%
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 17.53.
CNI's Price/Earnings ratio is a bit cheaper when compared to the industry. CNI is cheaper than 77.50% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.48. CNI is valued slightly cheaper when compared to this.
The Price/Forward Earnings ratio is 14.27, which indicates a correct valuation of CNI.
Based on the Price/Forward Earnings ratio, CNI is valued a bit cheaper than 80.00% of the companies in the same industry.
CNI is valuated cheaply when we compare the Price/Forward Earnings ratio to 34.04, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.53 | ||
| Fwd PE | 14.27 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as CNI.
Based on the Price/Free Cash Flow ratio, CNI is valued cheaper than 82.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.55 | ||
| EV/EBITDA | 11.94 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of CNI may justify a higher PE ratio.
PEG (NY)1.42
PEG (5Y)4.28
EPS Next 2Y12.06%
EPS Next 3Y11.89%
5. Dividend
5.1 Amount
CNI has a Yearly Dividend Yield of 2.74%. 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.
Compared to an average S&P500 Dividend Yield of 2.40, CNI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
5.2 History
The dividend of CNI is nicely growing with an annual growth rate of 9.39%!
CNI has paid a dividend for at least 10 years, which is a reliable track record.
CNI has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)9.39%
Div Incr Years27
Div Non Decr Years27
5.3 Sustainability
47.68% of the earnings are spent on dividend by CNI. 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.
DP47.68%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
92.57
+0.08 (+0.09%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners74.62%
Inst Owner Change0.88%
Ins Owners0.17%
Ins Owner ChangeN/A
Market Cap57.78B
Analysts72.86
Price Target119.61 (29.21%)
Short Float %0.97%
Short Ratio4.01
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.74% |
Yearly Dividend2.43
Dividend Growth(5Y)9.39%
DP47.68%
Div Incr Years27
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.91%
Min EPS beat(2)-0.91%
Max EPS beat(2)2.73%
EPS beat(4)1
Avg EPS beat(4)-1.89%
Min EPS beat(4)-8.25%
Max EPS beat(4)2.73%
EPS beat(8)2
Avg EPS beat(8)-2.08%
EPS beat(12)4
Avg EPS beat(12)-0.94%
EPS beat(16)7
Avg EPS beat(16)0.52%
Revenue beat(2)0
Avg Revenue beat(2)-1.51%
Min Revenue beat(2)-2.53%
Max Revenue beat(2)-0.5%
Revenue beat(4)0
Avg Revenue beat(4)-1.61%
Min Revenue beat(4)-2.53%
Max Revenue beat(4)-0.5%
Revenue beat(8)1
Avg Revenue beat(8)-1.59%
Revenue beat(12)4
Avg Revenue beat(12)-1.04%
Revenue beat(16)7
Avg Revenue beat(16)-0.33%
PT rev (1m)-2.75%
PT rev (3m)-3.63%
EPS NQ rev (1m)-5.4%
EPS NQ rev (3m)-8.22%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)-3.06%
Revenue NQ rev (3m)-4.35%
Revenue NY rev (1m)-1.89%
Revenue NY rev (3m)-2.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.53 | ||
| Fwd PE | 14.27 | ||
| P/S | 4.63 | ||
| P/FCF | 24.55 | ||
| P/OCF | 11.89 | ||
| P/B | 3.69 | ||
| P/tB | 3.69 | ||
| EV/EBITDA | 11.94 |
EPS(TTM)5.28
EY5.7%
EPS(NY)6.49
Fwd EY7.01%
FCF(TTM)3.77
FCFY4.07%
OCF(TTM)7.78
OCFY8.41%
SpS19.98
BVpS25.1
TBVpS25.1
PEG (NY)1.42
PEG (5Y)4.28
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.04% | ||
| ROE | 21.19% | ||
| ROCE | 12% | ||
| ROIC | 9.76% | ||
| ROICexc | 9.8% | ||
| ROICexgc | 9.8% | ||
| OM | 37.28% | ||
| PM (TTM) | 26.62% | ||
| GM | 75.22% | ||
| FCFM | 18.86% |
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 | 0.9 | ||
| Debt/FCF | 6.32 | ||
| Debt/EBITDA | 2.32 | ||
| Cap/Depr | 176.98% | ||
| Cap/Sales | 20.09% | ||
| Interest Coverage | 6.66 | ||
| Cash Conversion | 80.1% | ||
| Profit Quality | 70.86% | ||
| Current Ratio | 0.82 | ||
| Quick Ratio | 0.58 | ||
| Altman-Z | 2.48 |
F-Score6
WACC7.95%
ROIC/WACC1.23
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)-0.14%
EPS 3Y6.07%
EPS 5Y4.09%
EPS Q2Q%1.63%
EPS Next Y12.34%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
EPS Next 5Y10.1%
Revenue 1Y (TTM)0.63%
Revenue growth 3Y5.6%
Revenue growth 5Y2.7%
Sales Q2Q%-1.32%
Revenue Next Year1.61%
Revenue Next 2Y3.1%
Revenue Next 3Y3.62%
Revenue Next 5Y4.74%
EBIT growth 1Y-1.93%
EBIT growth 3Y4.37%
EBIT growth 5Y2.49%
EBIT Next Year38.13%
EBIT Next 3Y16.47%
EBIT Next 5Y12.09%
FCF growth 1Y-26.9%
FCF growth 3Y-8.26%
FCF growth 5Y8.89%
OCF growth 1Y-10.05%
OCF growth 3Y-1.32%
OCF growth 5Y2.49%