Logo image of CP.CA

CANADIAN PACIFIC KANSAS CITY (CP.CA) Stock Fundamental Analysis

TSX:CP - Toronto Stock Exchange - CA13646K1084 - Common Stock - Currency: CAD

111.99  +0.24 (+0.21%)

Fundamental Rating

4

CP gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 6 industry peers in the Ground Transportation industry. There are concerns on the financial health of CP while its profitability can be described as average. CP is quite expensive at the moment. It does show a decent growth rate.


Dividend Valuation Growth Profitability Health

5

1. Profitability

1.1 Basic Checks

In the past year CP was profitable.
CP had a positive operating cash flow in the past year.
CP had positive earnings in each of the past 5 years.
CP had a positive operating cash flow in each of the past 5 years.
CP.CA Yearly Net Income VS EBIT VS OCF VS FCFCP.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 2024 1B 2B 3B 4B 5B

1.2 Ratios

With a Return On Assets value of 4.31%, CP is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
CP's Return On Equity of 8.02% is on the low side compared to the rest of the industry. CP is outperformed by 66.67% of its industry peers.
CP has a worse Return On Invested Capital (5.25%) than 66.67% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CP is below the industry average of 7.71%.
The last Return On Invested Capital (5.25%) for CP is above the 3 year average (4.44%), which is a sign of increasing profitability.
Industry RankSector Rank
ROA 4.31%
ROE 8.02%
ROIC 5.25%
ROA(3y)4.65%
ROA(5y)5.69%
ROE(3y)8.76%
ROE(5y)13.62%
ROIC(3y)4.44%
ROIC(5y)5.79%
CP.CA Yearly ROA, ROE, ROICCP.CA Yearly ROA, ROE, ROICYearly ROA, ROE, ROIC 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10 20 30

1.3 Margins

CP has a Profit Margin of 24.50%. This is amongst the best in the industry. CP outperforms 83.33% of its industry peers.
In the last couple of years the Profit Margin of CP has declined.
Looking at the Operating Margin, with a value of 35.89%, CP belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
CP's Operating Margin has declined in the last couple of years.
With an excellent Gross Margin value of 84.49%, CP belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
CP's Gross Margin has been stable in the last couple of years.
Industry RankSector Rank
OM 35.89%
PM (TTM) 24.5%
GM 84.49%
OM growth 3Y-3.89%
OM growth 5Y-2.35%
PM growth 3Y-10.52%
PM growth 5Y-3.98%
GM growth 3Y-0.7%
GM growth 5Y-0.27%
CP.CA Yearly Profit, Operating, Gross MarginsCP.CA Yearly Profit, Operating, Gross MarginsYearly Profit, Operating, Gross Margins 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20 40 60 80

3

2. Health

2.1 Basic Checks

The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CP is destroying value.
CP has about the same amout of shares outstanding than it did 1 year ago.
Compared to 5 years ago, CP has more shares outstanding
Compared to 1 year ago, CP has an improved debt to assets ratio.
CP.CA Yearly Shares OutstandingCP.CA Yearly Shares OutstandingYearly Shares Outstanding 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 200M 400M 600M 800M
CP.CA Yearly Total Debt VS Total AssetsCP.CA Yearly Total Debt VS Total AssetsYearly Total Debt VS Total Assets 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 20B 40B 60B 80B

2.2 Solvency

An Altman-Z score of 2.30 indicates that CP is not a great score, but indicates only limited risk for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 2.30, CP is in line with its industry, outperforming 50.00% of the companies in the same industry.
The Debt to FCF ratio of CP is 10.52, which is on the high side as it means it would take CP, 10.52 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CP (10.52) is worse than 66.67% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that CP is not too dependend on debt financing.
With an excellent Debt to Equity ratio value of 0.43, CP belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 0.43
Debt/FCF 10.52
Altman-Z 2.3
ROIC/WACC0.67
WACC7.82%
CP.CA Yearly LT Debt VS Equity VS FCFCP.CA Yearly LT Debt VS Equity VS FCFYearly LT Debt VS Equity VS FCF 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 10B 20B 30B 40B

2.3 Liquidity

CP has a Current Ratio of 0.53. This is a bad value and indicates that CP is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of CP (0.53) is worse than 66.67% of its industry peers.
CP has a Quick Ratio of 0.53. This is a bad value and indicates that CP is not financially healthy enough and could expect problems in meeting its short term obligations.
CP has a Quick ratio of 0.46. This is in the lower half of the industry: CP underperforms 66.67% of its industry peers.
Industry RankSector Rank
Current Ratio 0.53
Quick Ratio 0.46
CP.CA Yearly Current Assets VS Current LiabilitesCP.CA Yearly Current Assets VS Current LiabilitesYearly Current Assets VS Current Liabilites 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B 4B 5B

5

3. Growth

3.1 Past

CP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 11.23%, which is quite good.
CP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.28% yearly.
Looking at the last year, CP shows a quite strong growth in Revenue. The Revenue has grown by 15.86% in the last year.
Measured over the past years, CP shows a quite strong growth in Revenue. The Revenue has been growing by 13.30% on average per year.
EPS 1Y (TTM)11.23%
EPS 3Y4.29%
EPS 5Y5.28%
EPS Q2Q%9.32%
Revenue 1Y (TTM)15.86%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%2.6%

3.2 Future

CP is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 12.92% yearly.
CP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.62% yearly.
EPS Next Y18.95%
EPS Next 2Y17.34%
EPS Next 3Y18%
EPS Next 5Y12.92%
Revenue Next Year7.99%
Revenue Next 2Y7.88%
Revenue Next 3Y8.76%
Revenue Next 5Y5.62%

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 decreasing: in the next years the growth will be less than in the last years.
CP.CA Yearly Revenue VS EstimatesCP.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 2031 5B 10B 15B 20B
CP.CA Yearly EPS VS EstimatesCP.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 2031 5 10

3

4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 26.29, which means the current valuation is very expensive for CP.
The rest of the industry has a similar Price/Earnings ratio as CP.
The average S&P500 Price/Earnings ratio is at 29.39. CP is around the same levels.
Based on the Price/Forward Earnings ratio of 22.10, the valuation of CP can be described as rather expensive.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CP is on the same level as its industry peers.
CP is valuated cheaply when we compare the Price/Forward Earnings ratio to 94.38, which is the current average of the S&P500 Index.
Industry RankSector Rank
PE 26.29
Fwd PE 22.1
CP.CA Price Earnings VS Forward Price EarningsCP.CA Price Earnings VS Forward Price Earnings ChartPrice Earnings - Forward Price Earnings PE FPE 20 40 60 80

4.2 Price Multiples

CP's Enterprise Value to EBITDA is on the same level as the industry average.
CP's Price/Free Cash Flow ratio is a bit more expensive when compared to the industry. CP is more expensive than 66.67% of the companies in the same industry.
Industry RankSector Rank
P/FCF 50.16
EV/EBITDA 17.8
CP.CA Per share dataCP.CA EPS, Sales, OCF, FCF, BookValue per sharePer Share Data Per Share 10 20 30 40

4.3 Compensation for Growth

CP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CP's earnings are expected to grow with 18.00% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.39
PEG (5Y)4.98
EPS Next 2Y17.34%
EPS Next 3Y18%

4

5. Dividend

5.1 Amount

CP has a yearly dividend return of 0.68%, which is pretty low.
Compared to an average industry Dividend Yield of 3.23, CP is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.30, CP's dividend is way lower than the S&P500 average.
Industry RankSector Rank
Dividend Yield 0.68%

5.2 History

The dividend of CP has a limited annual growth rate of 5.07%.
CP has paid a dividend for at least 10 years, which is a reliable track record.
CP has decreased its dividend recently.
Dividend Growth(5Y)5.07%
Div Incr Years0
Div Non Decr Years1
CP.CA Yearly Dividends per shareCP.CA Yearly Dividends per shareYearly Dividends per share 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 0.2 0.4 0.6 0.8

5.3 Sustainability

CP pays out 20.03% of its income as dividend. This is a sustainable payout ratio.
The dividend of CP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP20.03%
EPS Next 2Y17.34%
EPS Next 3Y18%
CP.CA Yearly Income VS Free CF VS DividendCP.CA Yearly Income VS Free CF VS DividendYearly Income VS Free CF VS Dividend 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1B 2B 3B
CP.CA Dividend Payout.CP.CA Dividend Payout, showing the Payout Ratio.CP.CA Dividend Payout.PayoutRetained Earnings

CANADIAN PACIFIC KANSAS CITY

TSX:CP (2/11/2025, 7:00:00 PM)

111.99

+0.24 (+0.21%)

Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)01-29 2025-01-29/amc
Earnings (Next)N/A N/A
Inst Owners78.84%
Inst Owner ChangeN/A
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap104.52B
Analysts81.62
Price Target129.14 (15.31%)
Short Float %N/A
Short RatioN/A
Dividend
Industry RankSector Rank
Dividend Yield 0.68%
Yearly Dividend0.76
Dividend Growth(5Y)5.07%
DP20.03%
Div Incr Years0
Div Non Decr Years1
Ex-Date03-28 2025-03-28 (0.19)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.97%
Min EPS beat(2)-4.38%
Max EPS beat(2)2.45%
EPS beat(4)2
Avg EPS beat(4)-0.85%
Min EPS beat(4)-4.38%
Max EPS beat(4)2.45%
EPS beat(8)2
Avg EPS beat(8)-3.24%
EPS beat(12)3
Avg EPS beat(12)-3.62%
EPS beat(16)3
Avg EPS beat(16)-3.54%
Revenue beat(2)0
Avg Revenue beat(2)-3.22%
Min Revenue beat(2)-4.24%
Max Revenue beat(2)-2.2%
Revenue beat(4)0
Avg Revenue beat(4)-2.61%
Min Revenue beat(4)-4.24%
Max Revenue beat(4)-0.61%
Revenue beat(8)0
Avg Revenue beat(8)-3.91%
Revenue beat(12)0
Avg Revenue beat(12)-3.88%
Revenue beat(16)0
Avg Revenue beat(16)-4.17%
PT rev (1m)-0.34%
PT rev (3m)0.21%
EPS NQ rev (1m)-2.08%
EPS NQ rev (3m)-1.53%
EPS NY rev (1m)-1.43%
EPS NY rev (3m)-0.1%
Revenue NQ rev (1m)-1.79%
Revenue NQ rev (3m)-1.88%
Revenue NY rev (1m)-0.34%
Revenue NY rev (3m)0.61%
Valuation
Industry RankSector Rank
PE 26.29
Fwd PE 22.1
P/S 7.23
P/FCF 50.16
P/OCF 21.33
P/B 2.37
P/tB 4.54
EV/EBITDA 17.8
EPS(TTM)4.26
EY3.8%
EPS(NY)5.07
Fwd EY4.52%
FCF(TTM)2.23
FCFY1.99%
OCF(TTM)5.25
OCFY4.69%
SpS15.48
BVpS47.3
TBVpS24.65
PEG (NY)1.39
PEG (5Y)4.98
Profitability
Industry RankSector Rank
ROA 4.31%
ROE 8.02%
ROCE 6.79%
ROIC 5.25%
ROICexc 5.29%
ROICexgc 7.31%
OM 35.89%
PM (TTM) 24.5%
GM 84.49%
FCFM 14.42%
ROA(3y)4.65%
ROA(5y)5.69%
ROE(3y)8.76%
ROE(5y)13.62%
ROIC(3y)4.44%
ROIC(5y)5.79%
ROICexc(3y)4.47%
ROICexc(5y)5.83%
ROICexgc(3y)5.72%
ROICexgc(5y)6.62%
ROCE(3y)5.74%
ROCE(5y)7.58%
ROICexcg growth 3Y21.24%
ROICexcg growth 5Y-10.62%
ROICexc growth 3Y9.04%
ROICexc growth 5Y-16.05%
OM growth 3Y-3.89%
OM growth 5Y-2.35%
PM growth 3Y-10.52%
PM growth 5Y-3.98%
GM growth 3Y-0.7%
GM growth 5Y-0.27%
F-Score7
Asset Turnover0.18
Health
Industry RankSector Rank
Debt/Equity 0.43
Debt/FCF 10.52
Debt/EBITDA 2.71
Cap/Depr 150.72%
Cap/Sales 19.5%
Interest Coverage 6.34
Cash Conversion 69.47%
Profit Quality 58.87%
Current Ratio 0.53
Quick Ratio 0.46
Altman-Z 2.3
F-Score7
WACC7.82%
ROIC/WACC0.67
Cap/Depr(3y)165.06%
Cap/Depr(5y)179.72%
Cap/Sales(3y)19.08%
Cap/Sales(5y)19.62%
Profit Quality(3y)59.97%
Profit Quality(5y)60.36%
High Growth Momentum
Growth
EPS 1Y (TTM)11.23%
EPS 3Y4.29%
EPS 5Y5.28%
EPS Q2Q%9.32%
EPS Next Y18.95%
EPS Next 2Y17.34%
EPS Next 3Y18%
EPS Next 5Y12.92%
Revenue 1Y (TTM)15.86%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%2.6%
Revenue Next Year7.99%
Revenue Next 2Y7.88%
Revenue Next 3Y8.76%
Revenue Next 5Y5.62%
EBIT growth 1Y26.89%
EBIT growth 3Y17.34%
EBIT growth 5Y10.64%
EBIT Next Year49.03%
EBIT Next 3Y22.42%
EBIT Next 5Y17.53%
FCF growth 1Y-4.75%
FCF growth 3Y3.72%
FCF growth 5Y12.37%
OCF growth 1Y8.41%
OCF growth 3Y12.63%
OCF growth 5Y12%