CANADIAN NATL RAILWAY CO (CNI) Stock Fundamental Analysis
NYSE:CNI - New York Stock Exchange, Inc. - CA1363751027 - Common Stock - Currency: USD
CNI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 41 industry peers in the Ground Transportation industry. While CNI belongs to the best of the industry regarding profitability, there are concerns on its financial health. CNI is not valued too expensively and it also shows a decent growth rate. Finally CNI also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year CNI was profitable.
CNI had a positive operating cash flow in the past year.
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
CNI has a Return On Assets of 7.79%. This is in the better half of the industry: CNI outperforms 78.05% of its industry peers.
CNI has a better Return On Equity (21.13%) than 82.93% of its industry peers.
With a decent Return On Invested Capital value of 9.56%, CNI is doing good in the industry, outperforming 75.61% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CNI is above the industry average of 7.89%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.79% | ||
| ROE | 21.13% | ||
| ROIC | 9.56% |
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 has a better Profit Margin (26.09%) than 95.12% of its industry peers.
In the last couple of years the Profit Margin of CNI has declined.
CNI's Operating Margin of 37.11% is amongst the best of the industry. CNI outperforms 92.68% of its industry peers.
CNI's Operating Margin has been stable in the last couple of years.
With an excellent Gross Margin value of 74.35%, CNI belongs to the best of the industry, outperforming 85.37% of the companies in the same industry.
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 | 37.11% | ||
| PM (TTM) | 26.09% | ||
| GM | 74.35% |
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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so CNI is still creating some value.
CNI has less shares outstanding than it did 1 year ago.
Compared to 5 years ago, CNI has less shares outstanding
The debt/assets ratio for CNI is higher compared to a year ago.
2.2 Solvency
CNI has an Altman-Z score of 2.53. 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.
Looking at the Altman-Z score, with a value of 2.53, CNI is in line with its industry, outperforming 58.54% of the companies in the same industry.
CNI has a debt to FCF ratio of 6.63. This is a slightly negative value and a sign of low solvency as CNI would need 6.63 years to pay back of all of its debts.
CNI has a better Debt to FCF ratio (6.63) than 70.73% of its industry peers.
A Debt/Equity ratio of 0.97 indicates that CNI is somewhat dependend on debt financing.
CNI has a worse Debt to Equity ratio (0.97) than 63.41% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.97 | ||
| Debt/FCF | 6.63 | ||
| Altman-Z | 2.53 |
ROIC/WACC1.21
WACC7.88%
2.3 Liquidity
CNI has a Current Ratio of 0.66. This is a bad value and indicates that CNI is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.66, CNI is doing worse than 82.93% of the companies in the same industry.
A Quick Ratio of 0.48 indicates that CNI may have some problems paying its short term obligations.
With a Quick ratio value of 0.48, CNI is not doing good in the industry: 85.37% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.48 |
3. Growth
3.1 Past
CNI shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -2.61%.
Measured over the past 5 years, CNI shows a small growth in Earnings Per Share. The EPS has been growing by 4.09% on average per year.
Looking at the last year, CNI shows a small growth in Revenue. The Revenue has grown by 1.30% in the last year.
CNI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 2.70% yearly.
EPS 1Y (TTM)-2.61%
EPS 3Y6.07%
EPS 5Y4.09%
EPS Q2Q%-9.9%
Revenue 1Y (TTM)1.3%
Revenue growth 3Y5.6%
Revenue growth 5Y2.7%
Sales Q2Q%-2.53%
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 9.80% on average per year.
The Revenue is expected to grow by 4.57% on average over the next years.
EPS Next Y12.34%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
EPS Next 5Y9.8%
Revenue Next Year4.67%
Revenue Next 2Y5.22%
Revenue Next 3Y5.44%
Revenue Next 5Y4.57%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 19.41 indicates a rather expensive valuation of CNI.
Based on the Price/Earnings ratio, CNI is valued a bit cheaper than the industry average as 73.17% of the companies are valued more expensively.
CNI is valuated rather cheaply when we compare the Price/Earnings ratio to 28.29, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 17.26 indicates a rather expensive valuation of CNI.
CNI's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CNI is cheaper than 68.29% of the companies in the same industry.
CNI's Price/Forward Earnings ratio indicates a similar valuation than the S&P500 average which is at 21.08.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.41 | ||
| Fwd PE | 17.26 |
4.2 Price Multiples
CNI's Enterprise Value to EBITDA ratio is in line with the industry average.
70.73% of the companies in the same industry are more expensive than CNI, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.46 | ||
| EV/EBITDA | 12.93 |
4.3 Compensation for Growth
CNI's 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)1.57
PEG (5Y)4.74
EPS Next 2Y12.06%
EPS Next 3Y11.89%
5. Dividend
5.1 Amount
CNI has a Yearly Dividend Yield of 2.59%.
Compared to an average industry Dividend Yield of 1.70, CNI pays a better dividend. On top of this CNI pays more dividend than 97.56% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.52, CNI has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
5.2 History
The dividend of CNI is nicely growing with an annual growth rate of 9.39%!
CNI has been paying a dividend for at least 10 years, so it has 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
48.07% 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.
DP48.07%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
99.17
+0.63 (+0.64%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners74.36%
Inst Owner Change0%
Ins Owners0.14%
Ins Owner ChangeN/A
Market Cap62.30B
Analysts73.79
Price Target121.22 (22.23%)
Short Float %0.53%
Short Ratio2.21
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
Yearly Dividend2.42
Dividend Growth(5Y)9.39%
DP48.07%
Div Incr Years27
Div Non Decr Years27
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.69%
Min EPS beat(2)-8.25%
Max EPS beat(2)-1.13%
EPS beat(4)0
Avg EPS beat(4)-4.11%
Min EPS beat(4)-8.25%
Max EPS beat(4)-1.13%
EPS beat(8)2
Avg EPS beat(8)-2.25%
EPS beat(12)4
Avg EPS beat(12)-0.75%
EPS beat(16)6
Avg EPS beat(16)0.19%
Revenue beat(2)0
Avg Revenue beat(2)-1.71%
Min Revenue beat(2)-2.24%
Max Revenue beat(2)-1.18%
Revenue beat(4)0
Avg Revenue beat(4)-1.98%
Min Revenue beat(4)-2.63%
Max Revenue beat(4)-1.18%
Revenue beat(8)2
Avg Revenue beat(8)-1.68%
Revenue beat(12)5
Avg Revenue beat(12)-0.32%
Revenue beat(16)7
Avg Revenue beat(16)-0.45%
PT rev (1m)0.2%
PT rev (3m)-2.4%
EPS NQ rev (1m)-0.2%
EPS NQ rev (3m)-3.62%
EPS NY rev (1m)-0.63%
EPS NY rev (3m)-4.22%
Revenue NQ rev (1m)0.18%
Revenue NQ rev (3m)-0.65%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.41 | ||
| Fwd PE | 17.26 | ||
| P/S | 5.07 | ||
| P/FCF | 27.46 | ||
| P/OCF | 12.91 | ||
| P/B | 4.11 | ||
| P/tB | 4.11 | ||
| EV/EBITDA | 12.93 |
EPS(TTM)5.11
EY5.15%
EPS(NY)5.74
Fwd EY5.79%
FCF(TTM)3.61
FCFY3.64%
OCF(TTM)7.68
OCFY7.74%
SpS19.54
BVpS24.13
TBVpS24.13
PEG (NY)1.57
PEG (5Y)4.74
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.79% | ||
| ROE | 21.13% | ||
| ROCE | 11.91% | ||
| ROIC | 9.56% | ||
| ROICexc | 9.63% | ||
| ROICexgc | 9.63% | ||
| OM | 37.11% | ||
| PM (TTM) | 26.09% | ||
| GM | 74.35% | ||
| FCFM | 18.48% |
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 | 0.97 | ||
| Debt/FCF | 6.63 | ||
| Debt/EBITDA | 2.49 | ||
| Cap/Depr | 187.58% | ||
| Cap/Sales | 20.82% | ||
| Interest Coverage | 6.83 | ||
| Cash Conversion | 81.53% | ||
| Profit Quality | 70.82% | ||
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.48 | ||
| Altman-Z | 2.53 |
F-Score6
WACC7.88%
ROIC/WACC1.21
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)-2.61%
EPS 3Y6.07%
EPS 5Y4.09%
EPS Q2Q%-9.9%
EPS Next Y12.34%
EPS Next 2Y12.06%
EPS Next 3Y11.89%
EPS Next 5Y9.8%
Revenue 1Y (TTM)1.3%
Revenue growth 3Y5.6%
Revenue growth 5Y2.7%
Sales Q2Q%-2.53%
Revenue Next Year4.67%
Revenue Next 2Y5.22%
Revenue Next 3Y5.44%
Revenue Next 5Y4.57%
EBIT growth 1Y-4.12%
EBIT growth 3Y4.37%
EBIT growth 5Y2.49%
EBIT Next Year40.22%
EBIT Next 3Y17%
EBIT Next 5Y11.43%
FCF growth 1Y-16.62%
FCF growth 3Y-8.26%
FCF growth 5Y8.89%
OCF growth 1Y-3.82%
OCF growth 3Y-1.32%
OCF growth 5Y2.49%