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CANADIAN NATL RAILWAY CO (CNR.CA) Stock Fundamental Analysis

TSX:CNR - Toronto Stock Exchange - CA1363751027 - Common Stock - Currency: CAD

145.02  -2.8 (-1.89%)

Fundamental Rating

5

CNR gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 6 industry peers in the Ground Transportation industry. CNR scores excellent on profitability, but there are concerns on its financial health. CNR is valued correctly, but it does not seem to be growing.


Dividend Valuation Growth Profitability Health

8

1. Profitability

1.1 Basic Checks

CNR had positive earnings in the past year.
In the past year CNR had a positive cash flow from operations.
CNR had positive earnings in 4 of the past 5 years.
CNR had a positive operating cash flow in 4 of the past 5 years.
CNR.CA Yearly Net Income VS EBIT VS OCF VS FCFCNR.CA Yearly Net Income VS EBIT VS OCF VS FCFYearly Net Income VS EBIT VS OCF VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2B 4B 6B

1.2 Ratios

CNR's Return On Assets of 9.97% is amongst the best of the industry. CNR outperforms 100.00% of its industry peers.
CNR has a better Return On Equity (27.92%) than 100.00% of its industry peers.
With an excellent Return On Invested Capital value of 10.45%, CNR belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
CNR had an Average Return On Invested Capital over the past 3 years of 10.80%. This is above the industry average of 7.96%.
Industry RankSector Rank
ROA 9.97%
ROE 27.92%
ROIC 10.45%
ROA(3y)10.29%
ROA(5y)9.69%
ROE(3y)24.47%
ROE(5y)22.98%
ROIC(3y)10.8%
ROIC(5y)10.76%
CNR.CA Yearly ROA, ROE, ROICCNR.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 10 20 30

1.3 Margins

CNR has a Profit Margin of 31.66%. This is amongst the best in the industry. CNR outperforms 100.00% of its industry peers.
In the last couple of years the Profit Margin of CNR has grown nicely.
Looking at the Operating Margin, with a value of 37.97%, CNR belongs to the top of the industry, outperforming 100.00% of the companies in the same industry.
In the last couple of years the Operating Margin of CNR has remained more or less at the same level.
CNR has a better Gross Margin (74.25%) than 83.33% of its industry peers.
In the last couple of years the Gross Margin of CNR has remained more or less at the same level.
Industry RankSector Rank
OM 37.97%
PM (TTM) 31.66%
GM 74.25%
OM growth 3Y0.97%
OM growth 5Y0.44%
PM growth 3Y9.05%
PM growth 5Y2.04%
GM growth 3Y-0.86%
GM growth 5Y0%
CNR.CA Yearly Profit, Operating, Gross MarginsCNR.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 20 40 60

3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CNR is still creating some value.
There is no outstanding debt for CNR. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
CNR.CA Yearly Shares OutstandingCNR.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 200M 400M 600M
CNR.CA Yearly Total Debt VS Total AssetsCNR.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 10B 20B 30B 40B 50B

2.2 Solvency

CNR has an Altman-Z score of 2.73. This is not the best score and indicates that CNR is in the grey zone with still only limited risk for bankruptcy at the moment.
CNR's Altman-Z score of 2.73 is fine compared to the rest of the industry. CNR outperforms 66.67% of its industry peers.
The Debt to FCF ratio of CNR is 5.78, which is a neutral value as it means it would take CNR, 5.78 years of fcf income to pay off all of its debts.
CNR has a Debt to FCF ratio (5.78) which is comparable to the rest of the industry.
CNR has a Debt/Equity ratio of 1.00. This is a high value indicating a heavy dependency on external financing.
The Debt to Equity ratio of CNR (1.00) is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 1
Debt/FCF 5.78
Altman-Z 2.73
ROIC/WACC1.4
WACC7.47%
CNR.CA Yearly LT Debt VS Equity VS FCFCNR.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 5B 10B 15B 20B

2.3 Liquidity

A Current Ratio of 0.64 indicates that CNR may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.64, CNR is in line with its industry, outperforming 50.00% of the companies in the same industry.
A Quick Ratio of 0.49 indicates that CNR may have some problems paying its short term obligations.
CNR's Quick ratio of 0.49 is in line compared to the rest of the industry. CNR outperforms 50.00% of its industry peers.
Industry RankSector Rank
Current Ratio 0.64
Quick Ratio 0.49
CNR.CA Yearly Current Assets VS Current LiabilitesCNR.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B

3

3. Growth

3.1 Past

The earnings per share for CNR have decreased by -1.74% in the last year.
The Earnings Per Share has been growing slightly by 4.28% on average over the past years.
EPS 1Y (TTM)-1.74%
EPS 3Y6.38%
EPS 5Y4.28%
EPS Q2Q%-6.77%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%0.92%

3.2 Future

Based on estimates for the next years, CNR will show a quite strong growth in Earnings Per Share. The EPS will grow by 10.83% on average per year.
The Revenue is expected to grow by 5.17% on average over the next years.
EPS Next Y14.71%
EPS Next 2Y13.56%
EPS Next 3Y12.93%
EPS Next 5Y10.83%
Revenue Next Year5.51%
Revenue Next 2Y5.61%
Revenue Next 3Y6.36%
Revenue Next 5Y5.17%

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.
CNR.CA Yearly Revenue VS EstimatesCNR.CA Yearly Revenue VS EstimatesYearly Revenue VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 5B 10B 15B 20B
CNR.CA Yearly EPS VS EstimatesCNR.CA Yearly EPS VS EstimatesYearly EPS VS Estimates 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2 4 6 8 10

6

4. Valuation

4.1 Price/Earnings Ratio

CNR is valuated rather expensively with a Price/Earnings ratio of 20.25.
83.33% of the companies in the same industry are more expensive than CNR, based on the Price/Earnings ratio.
CNR is valuated rather cheaply when we compare the Price/Earnings ratio to 28.12, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.65 indicates a rather expensive valuation of CNR.
66.67% of the companies in the same industry are more expensive than CNR, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 94.77, CNR is valued rather cheaply.
Industry RankSector Rank
PE 20.25
Fwd PE 17.65
CNR.CA Price Earnings VS Forward Price EarningsCNR.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

Based on the Enterprise Value to EBITDA ratio, CNR is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
66.67% of the companies in the same industry are more expensive than CNR, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 25.52
EV/EBITDA 13.44
CNR.CA Per share dataCNR.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30

4.3 Compensation for Growth

CNR's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CNR has an outstanding profitability rating, which may justify a higher PE ratio.
CNR's earnings are expected to grow with 12.93% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.38
PEG (5Y)4.74
EPS Next 2Y13.56%
EPS Next 3Y12.93%

6

5. Dividend

5.1 Amount

CNR has a Yearly Dividend Yield of 2.22%.
CNR's Dividend Yield is a higher than the industry average which is at 3.09.
CNR's Dividend Yield is comparable with the S&P500 average which is at 2.29.
Industry RankSector Rank
Dividend Yield 2.22%

5.2 History

On average, the dividend of CNR grows each year by 11.66%, which is quite nice.
CNR has been paying a dividend for at least 10 years, so it has a reliable track record.
CNR has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)11.66%
Div Incr Years28
Div Non Decr Years28
CNR.CA Yearly Dividends per shareCNR.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1 2 3

5.3 Sustainability

38.95% of the earnings are spent on dividend by CNR. This is a low number and sustainable payout ratio.
The dividend of CNR is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP38.95%
EPS Next 2Y13.56%
EPS Next 3Y12.93%
CNR.CA Yearly Income VS Free CF VS DividendCNR.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 1B 2B 3B 4B 5B
CNR.CA Dividend Payout.CNR.CA Dividend Payout, showing the Payout Ratio.CNR.CA Dividend Payout.PayoutRetained Earnings

CANADIAN NATL RAILWAY CO

TSX:CNR (2/7/2025, 7:00:00 PM)

145.02

-2.8 (-1.89%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)01-30 2025-01-30/amc
Earnings (Next)N/A N/A
Inst Owners77.07%
Inst Owner ChangeN/A
Ins Owners0.13%
Ins Owner ChangeN/A
Market Cap91.32B
Analysts68.97
Price Target176.82 (21.93%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 2.22%
Yearly Dividend3.15
Dividend Growth(5Y)11.66%
DP38.95%
Div Incr Years28
Div Non Decr Years28
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.4%
Min EPS beat(2)-5.66%
Max EPS beat(2)-1.13%
EPS beat(4)1
Avg EPS beat(4)-1.88%
Min EPS beat(4)-5.66%
Max EPS beat(4)0.66%
EPS beat(8)2
Avg EPS beat(8)-1.22%
EPS beat(12)5
Avg EPS beat(12)0.83%
EPS beat(16)7
Avg EPS beat(16)0.72%
Revenue beat(2)0
Avg Revenue beat(2)-1.9%
Min Revenue beat(2)-2.63%
Max Revenue beat(2)-1.18%
Revenue beat(4)1
Avg Revenue beat(4)-1.13%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)1.13%
Revenue beat(8)3
Avg Revenue beat(8)-1.34%
Revenue beat(12)6
Avg Revenue beat(12)-0.05%
Revenue beat(16)7
Avg Revenue beat(16)-0.31%
PT rev (1m)-0.9%
PT rev (3m)-0.52%
EPS NQ rev (1m)-5.5%
EPS NQ rev (3m)-6.25%
EPS NY rev (1m)-1.54%
EPS NY rev (3m)-1.8%
Revenue NQ rev (1m)-2.83%
Revenue NQ rev (3m)-2.76%
Revenue NY rev (1m)-0.76%
Revenue NY rev (3m)-0.79%
Valuation
Industry RankSector Rank
PE 20.25
Fwd PE 17.65
P/S 5.32
P/FCF 25.52
P/OCF 12.83
P/B 4.69
P/tB 4.69
EV/EBITDA 13.44
EPS(TTM)7.16
EY4.94%
EPS(NY)8.22
Fwd EY5.67%
FCF(TTM)5.68
FCFY3.92%
OCF(TTM)11.3
OCFY7.79%
SpS27.25
BVpS30.9
TBVpS30.9
PEG (NY)1.38
PEG (5Y)4.74
Profitability
Industry RankSector Rank
ROA 9.97%
ROE 27.92%
ROCE 13.09%
ROIC 10.45%
ROICexc 10.5%
ROICexgc 10.5%
OM 37.97%
PM (TTM) 31.66%
GM 74.25%
FCFM 20.85%
ROA(3y)10.29%
ROA(5y)9.69%
ROE(3y)24.47%
ROE(5y)22.98%
ROIC(3y)10.8%
ROIC(5y)10.76%
ROICexc(3y)10.93%
ROICexc(5y)10.87%
ROICexgc(3y)10.97%
ROICexgc(5y)10.92%
ROCE(3y)13.57%
ROCE(5y)13.51%
ROICexcg growth 3Y1.61%
ROICexcg growth 5Y-1.03%
ROICexc growth 3Y1.65%
ROICexc growth 5Y-1.07%
OM growth 3Y0.97%
OM growth 5Y0.44%
PM growth 3Y9.05%
PM growth 5Y2.04%
GM growth 3Y-0.86%
GM growth 5Y0%
F-Score6
Asset Turnover0.31
Health
Industry RankSector Rank
Debt/Equity 1
Debt/FCF 5.78
Debt/EBITDA 2.33
Cap/Depr 189.66%
Cap/Sales 20.62%
Interest Coverage 7.49
Cash Conversion 84.92%
Profit Quality 65.87%
Current Ratio 0.64
Quick Ratio 0.49
Altman-Z 2.73
F-Score6
WACC7.47%
ROIC/WACC1.4
Cap/Depr(3y)171.79%
Cap/Depr(5y)188.6%
Cap/Sales(3y)18.33%
Cap/Sales(5y)20.32%
Profit Quality(3y)75.7%
Profit Quality(5y)73.72%
High Growth Momentum
Growth
EPS 1Y (TTM)-1.74%
EPS 3Y6.38%
EPS 5Y4.28%
EPS Q2Q%-6.77%
EPS Next Y14.71%
EPS Next 2Y13.56%
EPS Next 3Y12.93%
EPS Next 5Y10.83%
Revenue 1Y (TTM)N/A
Revenue growth 3YN/A
Revenue growth 5YN/A
Sales Q2Q%0.92%
Revenue Next Year5.51%
Revenue Next 2Y5.61%
Revenue Next 3Y6.36%
Revenue Next 5Y5.17%
EBIT growth 1Y-2.63%
EBIT growth 3Y7.82%
EBIT growth 5Y3.73%
EBIT Next Year30.29%
EBIT Next 3Y15.14%
EBIT Next 5Y10.9%
FCF growth 1Y-4.25%
FCF growth 3Y4.59%
FCF growth 5Y9.62%
OCF growth 1Y9.81%
OCF growth 3Y4.15%
OCF growth 5Y3.31%