CANADIAN PACIFIC KANSAS CITY (CP)
CA13646K1084 - Common Stock
Taking everything into account, CP scores 5 out of 10 in our fundamental rating. CP was compared to 36 industry peers in the Ground Transportation industry. While CP has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, CP is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
In the past year CP was profitable.
CP had a positive operating cash flow in the past year.
Each year in the past 5 years CP has been profitable.
In the past 5 years CP always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.91%, CP is in line with its industry, outperforming 58.33% of the companies in the same industry.
CP's Return On Equity of 9.46% is in line compared to the rest of the industry. CP outperforms 58.33% of its industry peers.
CP has a Return On Invested Capital of 5.16%. This is comparable to the rest of the industry: CP outperforms 58.33% of its industry peers.
CP had an Average Return On Invested Capital over the past 3 years of 4.45%. This is below the industry average of 7.83%.
The 3 year average ROIC (4.45%) for CP is below the current ROIC(5.16%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.91% | ||
| ROE | 9.46% | ||
| ROIC | 5.16% |
ROA(3y)4.63%
ROA(5y)7.03%
ROE(3y)8.98%
ROE(5y)18.97%
ROIC(3y)4.45%
ROIC(5y)7.82%
1.3 Margins
CP has a Profit Margin of 31.28%. This is amongst the best in the industry. CP outperforms 97.22% of its industry peers.
CP's Profit Margin has improved in the last couple of years.
CP has a better Operating Margin (36.42%) than 91.67% of its industry peers.
CP's Operating Margin has been stable in the last couple of years.
CP has a better Gross Margin (83.87%) than 91.67% of its industry peers.
CP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.42% | ||
| PM (TTM) | 31.28% | ||
| GM | 83.87% |
OM growth 3Y-5.35%
OM growth 5Y-0.96%
PM growth 3Y-0.44%
PM growth 5Y3.24%
GM growth 3Y-1.86%
GM growth 5Y-0.2%
2. Health
2.1 Basic Checks
CP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
The number of shares outstanding for CP remains at a similar level compared to 1 year ago.
The number of shares outstanding for CP has been increased compared to 5 years ago.
CP has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.14 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 2.14, CP is in line with its industry, outperforming 44.44% of the companies in the same industry.
CP has a debt to FCF ratio of 13.73. This is a negative value and a sign of low solvency as CP would need 13.73 years to pay back of all of its debts.
With a decent Debt to FCF ratio value of 13.73, CP is doing good in the industry, outperforming 75.00% of the companies in the same industry.
A Debt/Equity ratio of 0.49 indicates that CP is not too dependend on debt financing.
CP's Debt to Equity ratio of 0.49 is in line compared to the rest of the industry. CP outperforms 58.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | 13.73 | ||
| Altman-Z | 2.14 |
ROIC/WACC0.71
WACC7.25%
2.3 Liquidity
A Current Ratio of 0.53 indicates that CP may have some problems paying its short term obligations.
CP has a Current ratio of 0.53. This is amonst the worse of the industry: CP underperforms 88.89% 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 amonst the worse of the industry: CP underperforms 88.89% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
CP shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 2.68%.
CP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.68% yearly.
The Revenue has grown by 42.44% in the past year. This is a very strong growth!
CP shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.41% yearly.
EPS 1Y (TTM)2.68%
EPS 3Y2.72%
EPS 5Y5.68%
EPS growth Q2Q7.27%
Revenue 1Y (TTM)42.44%
Revenue growth 3Y17.65%
Revenue growth 5Y11.41%
Revenue growth Q2Q53.37%
3.2 Future
The Earnings Per Share is expected to grow by 15.63% on average over the next years. This is quite good.
Based on estimates for the next years, CP will show a quite strong growth in Revenue. The Revenue will grow by 8.12% on average per year.
EPS Next Y16.71%
EPS Next 2Y17.89%
EPS Next 3Y17.15%
EPS Next 5Y15.63%
Revenue Next Year11.3%
Revenue Next 2Y9.87%
Revenue Next 3Y9.34%
Revenue Next 5Y8.12%
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.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 27.70, which means the current valuation is very expensive for CP.
CP's Price/Earnings ratio is in line with the industry average.
CP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 24.55, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 23.76, the valuation of CP can be described as rather expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as CP.
CP's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 20.92.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.7 | ||
| Fwd PE | 23.76 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CP is valued a bit more expensive than the industry average as 63.89% of the companies are valued more cheaply.
CP's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. CP is cheaper than 75.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 60.46 | ||
| EV/EBITDA | 19.63 |
4.3 Compensation for Growth
CP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
The decent profitability rating of CP may justify a higher PE ratio.
A more expensive valuation may be justified as CP's earnings are expected to grow with 17.15% in the coming years.
PEG (NY)1.66
PEG (5Y)4.88
EPS Next 2Y17.89%
EPS Next 3Y17.15%
5. Dividend
5.1 Amount
CP has a yearly dividend return of 0.70%, which is pretty low.
CP's Dividend Yield is comparable with the industry average which is at 1.74.
Compared to an average S&P500 Dividend Yield of 2.39, CP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
5.2 History
The dividend of CP is nicely growing with an annual growth rate of 9.27%!
CP has paid a dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)9.27%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
CP pays out 18.00% 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.
DP18%
EPS Next 2Y17.89%
EPS Next 3Y17.15%
CANADIAN PACIFIC KANSAS CITY
NYSE:CP (5/1/2024, 7:04:00 PM)
After market: 77.75 +0.18 (+0.23%)77.57
-0.86 (-1.1%)
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 Cap72.35B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.7% |
Dividend Growth(5Y)
DP
Div Incr Years
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Ex-Date
Surprises & Revisions
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EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.7 | ||
| Fwd PE | 23.76 | ||
| 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)1.66
PEG (5Y)4.88
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.91% | ||
| ROE | 9.46% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 36.42% | ||
| PM (TTM) | 31.28% | ||
| GM | 83.87% | ||
| 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 Turnover0.16
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.49 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.46 | ||
| 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)2.68%
EPS 3Y2.72%
EPS 5Y
EPS growth Q2Q
EPS Next Y16.71%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)42.44%
Revenue growth 3Y17.65%
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
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FCF growth 1Y
FCF growth 3Y
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