CANADIAN PACIFIC KANSAS CITY (CP.CA) Stock Fundamental Analysis
TSX:CP - Toronto Stock Exchange - CA13646K1084 - Common Stock - Currency: CAD
Taking everything into account, CP scores 4 out of 10 in our fundamental rating. CP was compared to 5 industry peers in the Ground Transportation industry. CP has a medium profitability rating, but doesn't score so well on its financial health evaluation. CP is valied quite expensively at the moment, while it does show a decent growth rate.
1. Profitability
1.1 Basic Checks
CP had positive earnings in the past year.
In the past year CP had a positive cash flow from operations.
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
The Return On Assets of CP (4.31%) is worse than 66.67% of its industry peers.
CP has a worse Return On Equity (8.02%) than 66.67% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.25%, CP is doing worse than 66.67% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CP is below the industry average of 7.67%.
The 3 year average ROIC (4.44%) for CP is below the current ROIC(5.25%), indicating increased profibility in the last year.
| Industry Rank | Sector 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%
1.3 Margins
CP's Profit Margin of 24.50% is amongst the best of the industry. CP outperforms 83.33% of its industry peers.
In the last couple of years the Profit Margin of CP has declined.
CP has a better Operating Margin (35.89%) than 83.33% of its industry peers.
CP's Operating Margin has declined in the last couple of years.
CP has a Gross Margin of 84.49%. This is amongst the best in the industry. CP outperforms 100.00% 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 | 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%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so CP 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.
Compared to 1 year ago, CP has an improved debt to assets ratio.
2.2 Solvency
CP has an Altman-Z score of 2.28. This is not the best score and indicates that CP is in the grey zone with still only limited risk for bankruptcy at the moment.
CP has a Altman-Z score of 2.28. This is comparable to the rest of the industry: CP outperforms 50.00% of its industry peers.
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.
CP has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
CP has a better Debt to Equity ratio (0.43) than 100.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 10.52 | ||
| Altman-Z | 2.28 |
ROIC/WACC0.67
WACC7.87%
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 in the lower half of the industry: CP underperforms 66.67% of its industry peers.
A Quick Ratio of 0.46 indicates that CP may have some problems paying its short term obligations.
CP has a worse Quick ratio (0.46) than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.46 |
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.
The Revenue has been growing by 13.30% on average over the past years. This is quite good.
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
Based on estimates for the next years, CP will show a quite strong growth in Earnings Per Share. The EPS will grow by 12.92% on average per year.
The Revenue is expected to grow by 5.65% on average over the next years.
EPS Next Y19%
EPS Next 2Y17.35%
EPS Next 3Y16.56%
EPS Next 5Y12.92%
Revenue Next Year8.29%
Revenue Next 2Y7.93%
Revenue Next 3Y7.92%
Revenue Next 5Y5.65%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 25.85, the valuation of CP can be described as expensive.
CP's Price/Earnings is on the same level as the industry average.
The average S&P500 Price/Earnings ratio is at 29.62. CP is around the same levels.
With a Price/Forward Earnings ratio of 21.72, CP is valued on the expensive side.
The rest of the industry has a similar Price/Forward Earnings ratio as CP.
The average S&P500 Price/Forward Earnings ratio is at 22.70. CP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.85 | ||
| Fwd PE | 21.72 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CP is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, CP is valued a bit more expensive than 66.67% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 49.33 | ||
| EV/EBITDA | 17.56 |
4.3 Compensation for Growth
CP's PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a correct valuation of the company.
A more expensive valuation may be justified as CP's earnings are expected to grow with 16.56% in the coming years.
PEG (NY)1.36
PEG (5Y)4.9
EPS Next 2Y17.35%
EPS Next 3Y16.56%
5. Dividend
5.1 Amount
CP has a yearly dividend return of 0.69%, which is pretty low.
Compared to an average industry Dividend Yield of 2.78, CP is paying slightly less dividend.
Compared to an average S&P500 Dividend Yield of 2.27, CP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
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
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 2Y17.35%
EPS Next 3Y16.56%
TSX:CP (2/21/2025, 7:00:00 PM)
110.12
-0.44 (-0.4%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners74.87%
Inst Owner ChangeN/A
Ins Owners0.02%
Ins Owner ChangeN/A
Market Cap102.81B
Analysts81.62
Price Target130.19 (18.23%)
Short Float %N/A
Short RatioN/A
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.69% |
Yearly Dividend0.76
Dividend Growth(5Y)5.07%
DP20.03%
Div Incr Years0
Div Non Decr Years1
Ex-Date
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)0.47%
PT rev (3m)1.02%
EPS NQ rev (1m)-2.08%
EPS NQ rev (3m)-1.53%
EPS NY rev (1m)-1.39%
EPS NY rev (3m)-0.06%
Revenue NQ rev (1m)-1.79%
Revenue NQ rev (3m)-1.88%
Revenue NY rev (1m)0.14%
Revenue NY rev (3m)0.75%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.85 | ||
| Fwd PE | 21.72 | ||
| P/S | 7.12 | ||
| P/FCF | 49.33 | ||
| P/OCF | 20.98 | ||
| P/B | 2.33 | ||
| P/tB | 4.47 | ||
| EV/EBITDA | 17.56 |
EPS(TTM)4.26
EY3.87%
EPS(NY)5.07
Fwd EY4.6%
FCF(TTM)2.23
FCFY2.03%
OCF(TTM)5.25
OCFY4.77%
SpS15.48
BVpS47.28
TBVpS24.65
PEG (NY)1.36
PEG (5Y)4.9
Profitability
| Industry Rank | Sector 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 Rank | Sector 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 | 2.28 |
F-Score7
WACC7.87%
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 Y19%
EPS Next 2Y17.35%
EPS Next 3Y16.56%
EPS Next 5Y12.92%
Revenue 1Y (TTM)15.86%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%2.6%
Revenue Next Year8.29%
Revenue Next 2Y7.93%
Revenue Next 3Y7.92%
Revenue Next 5Y5.65%
EBIT growth 1Y26.89%
EBIT growth 3Y17.34%
EBIT growth 5Y10.64%
EBIT Next Year50.9%
EBIT Next 3Y22.93%
EBIT Next 5Y17.89%
FCF growth 1Y-4.75%
FCF growth 3Y3.72%
FCF growth 5Y12.37%
OCF growth 1Y8.41%
OCF growth 3Y12.63%
OCF growth 5Y12%