CANADIAN PACIFIC KANSAS CITY (CP) Stock Fundamental Analysis
NYSE:CP - New York Stock Exchange, Inc. - CA13646K1084 - Common Stock - Currency: USD
Taking everything into account, CP scores 5 out of 10 in our fundamental rating. CP was compared to 39 industry peers in the Ground Transportation industry. While CP is still in line with the averages on profitability rating, there are concerns on its financial health. CP has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
CP had positive earnings in the past year.
CP had a positive operating cash flow in the past year.
In the past 5 years CP has always been profitable.
CP had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
CP's Return On Assets of 4.24% is fine compared to the rest of the industry. CP outperforms 61.54% of its industry peers.
Looking at the Return On Equity, with a value of 7.76%, CP is in line with its industry, outperforming 56.41% of the companies in the same industry.
The Return On Invested Capital of CP (4.92%) is comparable to the rest of the industry.
The Average Return On Invested Capital over the past 3 years for CP is below the industry average of 7.67%.
The last Return On Invested Capital (4.92%) for CP is above the 3 year average (4.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.24% | ||
| ROE | 7.76% | ||
| ROIC | 4.92% |
ROA(3y)4.65%
ROA(5y)5.69%
ROE(3y)8.76%
ROE(5y)13.62%
ROIC(3y)4.45%
ROIC(5y)5.79%
1.3 Margins
CP has a Profit Margin of 25.56%. This is amongst the best in the industry. CP outperforms 87.18% of its industry peers.
In the last couple of years the Profit Margin of CP has declined.
CP has a Operating Margin of 36.40%. This is amongst the best in the industry. CP outperforms 92.31% of its industry peers.
CP's Operating Margin has declined in the last couple of years.
CP has a Gross Margin of 84.86%. This is amongst the best in the industry. CP outperforms 94.87% of its industry peers.
In the last couple of years the Gross Margin of CP has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 36.4% | ||
| PM (TTM) | 25.56% | ||
| GM | 84.86% |
OM growth 3Y-3.17%
OM growth 5Y-1.91%
PM growth 3Y-10.52%
PM growth 5Y-3.98%
GM growth 3Y-0.68%
GM growth 5Y-0.26%
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.
Compared to 5 years ago, CP has more shares outstanding
The debt/assets ratio for CP has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.21 indicates that CP is not a great score, but indicates only limited risk for bankruptcy at the moment.
CP has a Altman-Z score of 2.21. This is comparable to the rest of the industry: CP outperforms 51.28% of its industry peers.
The Debt to FCF ratio of CP is 9.40, which is on the high side as it means it would take CP, 9.40 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of CP (9.40) is better than 61.54% of its industry peers.
A Debt/Equity ratio of 0.45 indicates that CP is not too dependend on debt financing.
The Debt to Equity ratio of CP (0.45) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 9.4 | ||
| Altman-Z | 2.21 |
ROIC/WACC0.61
WACC8.04%
2.3 Liquidity
CP has a Current Ratio of 0.60. This is a bad value and indicates that CP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.60, CP is doing worse than 92.31% of the companies in the same industry.
CP has a Quick Ratio of 0.60. 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's Quick ratio of 0.52 is on the low side compared to the rest of the industry. CP is outperformed by 89.74% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
CP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 13.73%, which is quite good.
Measured over the past 5 years, CP shows a small growth in Earnings Per Share. The EPS has been growing by 5.28% on average per year.
CP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.86%.
The Revenue has been growing by 13.30% on average over the past years. This is quite good.
EPS 1Y (TTM)13.73%
EPS 3Y4.29%
EPS 5Y5.28%
EPS Q2Q%13.98%
Revenue 1Y (TTM)15.86%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%7.81%
3.2 Future
The Earnings Per Share is expected to grow by 12.86% on average over the next years. This is quite good.
Based on estimates for the next years, CP will show a small growth in Revenue. The Revenue will grow by 6.22% on average per year.
EPS Next Y17.65%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
EPS Next 5Y12.86%
Revenue Next Year6.68%
Revenue Next 2Y6.83%
Revenue Next 3Y7.09%
Revenue Next 5Y6.22%
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
A Price/Earnings ratio of 25.62 indicates a quite expensive valuation of CP.
Compared to the rest of the industry, the Price/Earnings ratio of CP indicates a somewhat cheap valuation: CP is cheaper than 66.67% of the companies listed in the same industry.
CP's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.20.
Based on the Price/Forward Earnings ratio of 19.45, 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.
When comparing the Price/Forward Earnings ratio of CP to the average of the S&P500 Index (22.13), we can say CP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.62 | ||
| Fwd PE | 19.45 |
4.2 Price Multiples
CP's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, CP is valued a bit cheaper than the industry average as 61.54% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.43 | ||
| EV/EBITDA | 17.26 |
4.3 Compensation for Growth
The PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
CP has a very decent profitability rating, which may justify a higher PE ratio.
CP's earnings are expected to grow with 15.96% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.45
PEG (5Y)4.85
EPS Next 2Y16.41%
EPS Next 3Y15.96%
5. Dividend
5.1 Amount
CP has a yearly dividend return of 0.71%, which is pretty low.
Compared to an average industry Dividend Yield of 1.61, CP has a dividend in line with its industry peers.
With a Dividend Yield of 0.71, CP pays less dividend than the S&P500 average, which is at 2.40.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
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
5.3 Sustainability
19.07% of the earnings are spent on dividend by CP. This is a low number and sustainable payout ratio.
The dividend of CP is growing, but earnings are growing more, so the dividend growth is sustainable.
DP19.07%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
81.21
+0.46 (+0.57%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners74.87%
Inst Owner Change-0.77%
Ins Owners0.02%
Ins Owner Change0%
Market Cap75.56B
Analysts82.29
Price Target89.49 (10.2%)
Short Float %0.91%
Short Ratio2.24
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
Yearly Dividend0.55
Dividend Growth(5Y)5.07%
DP19.07%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.68%
Min EPS beat(2)-4.38%
Max EPS beat(2)1.02%
EPS beat(4)2
Avg EPS beat(4)-1.21%
Min EPS beat(4)-4.38%
Max EPS beat(4)2.45%
EPS beat(8)3
Avg EPS beat(8)-3.07%
EPS beat(12)4
Avg EPS beat(12)-2.99%
EPS beat(16)4
Avg EPS beat(16)-3.31%
Revenue beat(2)0
Avg Revenue beat(2)-3.83%
Min Revenue beat(2)-4.24%
Max Revenue beat(2)-3.42%
Revenue beat(4)0
Avg Revenue beat(4)-3.31%
Min Revenue beat(4)-4.24%
Max Revenue beat(4)-2.2%
Revenue beat(8)0
Avg Revenue beat(8)-3.8%
Revenue beat(12)0
Avg Revenue beat(12)-3.87%
Revenue beat(16)0
Avg Revenue beat(16)-3.99%
PT rev (1m)-1.75%
PT rev (3m)-0.43%
EPS NQ rev (1m)-0.51%
EPS NQ rev (3m)-4.53%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.14%
Revenue NQ rev (1m)-0.08%
Revenue NQ rev (3m)-0.97%
Revenue NY rev (1m)-0.91%
Revenue NY rev (3m)-1.48%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.62 | ||
| Fwd PE | 19.45 | ||
| P/S | 7.18 | ||
| P/FCF | 43.43 | ||
| P/OCF | 19.83 | ||
| P/B | 2.18 | ||
| P/tB | 4.11 | ||
| EV/EBITDA | 17.26 |
EPS(TTM)3.17
EY3.9%
EPS(NY)4.17
Fwd EY5.14%
FCF(TTM)1.87
FCFY2.3%
OCF(TTM)4.1
OCFY5.04%
SpS11.31
BVpS37.22
TBVpS19.74
PEG (NY)1.45
PEG (5Y)4.85
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.24% | ||
| ROE | 7.76% | ||
| ROCE | 6.45% | ||
| ROIC | 4.92% | ||
| ROICexc | 4.97% | ||
| ROICexgc | 6.82% | ||
| OM | 36.4% | ||
| PM (TTM) | 25.56% | ||
| GM | 84.86% | ||
| FCFM | 16.54% |
ROA(3y)4.65%
ROA(5y)5.69%
ROE(3y)8.76%
ROE(5y)13.62%
ROIC(3y)4.45%
ROIC(5y)5.79%
ROICexc(3y)4.48%
ROICexc(5y)5.83%
ROICexgc(3y)5.71%
ROICexgc(5y)6.61%
ROCE(3y)5.78%
ROCE(5y)7.61%
ROICexcg growth 3Y21.06%
ROICexcg growth 5Y-10.7%
ROICexc growth 3Y9.14%
ROICexc growth 5Y-16%
OM growth 3Y-3.17%
OM growth 5Y-1.91%
PM growth 3Y-10.52%
PM growth 5Y-3.98%
GM growth 3Y-0.68%
GM growth 5Y-0.26%
F-Score7
Asset Turnover0.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 9.4 | ||
| Debt/EBITDA | 2.97 | ||
| Cap/Depr | 150.68% | ||
| Cap/Sales | 19.68% | ||
| Interest Coverage | 6.5 | ||
| Cash Conversion | 73.23% | ||
| Profit Quality | 64.71% | ||
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 2.21 |
F-Score7
WACC8.04%
ROIC/WACC0.61
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)13.73%
EPS 3Y4.29%
EPS 5Y5.28%
EPS Q2Q%13.98%
EPS Next Y17.65%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
EPS Next 5Y12.86%
Revenue 1Y (TTM)15.86%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%7.81%
Revenue Next Year6.68%
Revenue Next 2Y6.83%
Revenue Next 3Y7.09%
Revenue Next 5Y6.22%
EBIT growth 1Y15.81%
EBIT growth 3Y18.2%
EBIT growth 5Y11.13%
EBIT Next Year45.73%
EBIT Next 3Y20.54%
EBIT Next 5Y14.37%
FCF growth 1Y46.89%
FCF growth 3Y3.72%
FCF growth 5Y12.37%
OCF growth 1Y27.36%
OCF growth 3Y12.63%
OCF growth 5Y12%