CANADIAN PACIFIC KANSAS CITY (CP) Stock Fundamental Analysis
NYSE:CP - New York Stock Exchange, Inc. - CA13646K1084 - Common Stock - Currency: USD
Overall CP gets a fundamental rating of 5 out of 10. We evaluated CP against 40 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 has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
In the past year CP was profitable.
In the past year CP had a positive cash flow from operations.
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.
1.2 Ratios
With a Return On Assets value of 4.38%, CP perfoms like the industry average, outperforming 57.50% of the companies in the same industry.
CP has a Return On Equity of 7.99%. This is comparable to the rest of the industry: CP outperforms 52.50% of its industry peers.
CP has a Return On Invested Capital of 5.00%. This is comparable to the rest of the industry: CP outperforms 55.00% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CP is below the industry average of 8.58%.
The last Return On Invested Capital (5.00%) for CP is above the 3 year average (4.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.38% | ||
| ROE | 7.99% | ||
| ROIC | 5% |
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 better Profit Margin (26.00%) than 87.50% of its industry peers.
CP's Profit Margin has declined in the last couple of years.
Looking at the Operating Margin, with a value of 36.85%, CP belongs to the top of the industry, outperforming 92.50% of the companies in the same industry.
CP's Operating Margin has declined in the last couple of years.
The Gross Margin of CP (84.78%) is better than 95.00% 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 | 36.85% | ||
| PM (TTM) | 26% | ||
| GM | 84.78% |
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), 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
The debt/assets ratio for CP has been reduced compared to a year ago.
2.2 Solvency
An Altman-Z score of 2.23 indicates that CP is not a great score, but indicates only limited risk for bankruptcy at the moment.
CP has a Altman-Z score (2.23) which is in line with its industry peers.
CP has a debt to FCF ratio of 9.62. This is a negative value and a sign of low solvency as CP would need 9.62 years to pay back of all of its debts.
CP has a Debt to FCF ratio of 9.62. This is in the better half of the industry: CP outperforms 65.00% of its industry peers.
A Debt/Equity ratio of 0.46 indicates that CP is not too dependend on debt financing.
CP's Debt to Equity ratio of 0.46 is in line compared to the rest of the industry. CP outperforms 42.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 9.62 | ||
| Altman-Z | 2.23 |
ROIC/WACC0.63
WACC7.99%
2.3 Liquidity
A Current Ratio of 0.81 indicates that CP may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.81, CP is doing worse than 72.50% of the companies in the same industry.
A Quick Ratio of 0.70 indicates that CP may have some problems paying its short term obligations.
CP's Quick ratio of 0.70 is on the low side compared to the rest of the industry. CP is outperformed by 82.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.7 |
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.
CP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.28% yearly.
The Revenue has been growing slightly by 7.33% in the past year.
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)7.33%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%7.81%
3.2 Future
The Earnings Per Share is expected to grow by 12.59% on average over the next years. This is quite good.
CP is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 5.86% yearly.
EPS Next Y17.65%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
EPS Next 5Y12.59%
Revenue Next Year6.68%
Revenue Next 2Y6.83%
Revenue Next 3Y7.09%
Revenue Next 5Y5.86%
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
Based on the Price/Earnings ratio of 25.14, the valuation of CP can be described as expensive.
Based on the Price/Earnings ratio, CP is valued a bit cheaper than 62.50% of the companies in the same industry.
When comparing the Price/Earnings ratio of CP to the average of the S&P500 Index (27.30), we can say CP is valued inline with the index average.
A Price/Forward Earnings ratio of 19.10 indicates a rather expensive valuation of CP.
CP's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. CP is cheaper than 62.50% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, CP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.14 | ||
| Fwd PE | 19.1 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CP indicates a slightly more expensive valuation: CP is more expensive than 60.00% of the companies listed in the same industry.
Based on the Price/Free Cash Flow ratio, CP is valued a bit cheaper than 62.50% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 43.56 | ||
| EV/EBITDA | 16.68 |
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.
A more expensive valuation may be justified as CP's earnings are expected to grow with 15.96% in the coming years.
PEG (NY)1.42
PEG (5Y)4.76
EPS Next 2Y16.41%
EPS Next 3Y15.96%
5. Dividend
5.1 Amount
CP has a yearly dividend return of 0.72%, which is pretty low.
CP's Dividend Yield is comparable with the industry average which is at 1.47.
Compared to an average S&P500 Dividend Yield of 2.37, CP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
5.2 History
The dividend of CP has a limited annual growth rate of 5.07%.
CP has been paying a dividend for at least 10 years, so it has 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 18.40% of its income as dividend. This is a sustainable payout ratio.
CP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP18.4%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
80.71
+1.02 (+1.28%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners75.63%
Inst Owner Change0%
Ins Owners0.02%
Ins Owner Change0%
Market Cap75.10B
Analysts82.35
Price Target90.31 (11.89%)
Short Float %1.1%
Short Ratio3.47
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.72% |
Yearly Dividend0.56
Dividend Growth(5Y)5.07%
DP18.4%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.11%
Min EPS beat(2)-1.24%
Max EPS beat(2)1.02%
EPS beat(4)2
Avg EPS beat(4)-0.54%
Min EPS beat(4)-4.38%
Max EPS beat(4)2.45%
EPS beat(8)3
Avg EPS beat(8)-2.49%
EPS beat(12)4
Avg EPS beat(12)-2.3%
EPS beat(16)4
Avg EPS beat(16)-3.38%
Revenue beat(2)0
Avg Revenue beat(2)-2.65%
Min Revenue beat(2)-3.42%
Max Revenue beat(2)-1.89%
Revenue beat(4)0
Avg Revenue beat(4)-2.93%
Min Revenue beat(4)-4.24%
Max Revenue beat(4)-1.89%
Revenue beat(8)0
Avg Revenue beat(8)-3.15%
Revenue beat(12)0
Avg Revenue beat(12)-3.38%
Revenue beat(16)0
Avg Revenue beat(16)-3.81%
PT rev (1m)0.91%
PT rev (3m)0.15%
EPS NQ rev (1m)-0.17%
EPS NQ rev (3m)-4.27%
EPS NY rev (1m)0%
EPS NY rev (3m)-1.17%
Revenue NQ rev (1m)-0.2%
Revenue NQ rev (3m)-1.76%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-1.39%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.14 | ||
| Fwd PE | 19.1 | ||
| P/S | 6.92 | ||
| P/FCF | 43.56 | ||
| P/OCF | 18.96 | ||
| P/B | 2.13 | ||
| P/tB | 3.98 | ||
| EV/EBITDA | 16.68 |
EPS(TTM)3.21
EY3.98%
EPS(NY)4.23
Fwd EY5.24%
FCF(TTM)1.85
FCFY2.3%
OCF(TTM)4.26
OCFY5.27%
SpS11.66
BVpS37.96
TBVpS20.29
PEG (NY)1.42
PEG (5Y)4.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.38% | ||
| ROE | 7.99% | ||
| ROCE | 6.52% | ||
| ROIC | 5% | ||
| ROICexc | 5.05% | ||
| ROICexgc | 6.88% | ||
| OM | 36.85% | ||
| PM (TTM) | 26% | ||
| GM | 84.78% | ||
| FCFM | 15.89% |
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-Score6
Asset Turnover0.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.46 | ||
| Debt/FCF | 9.62 | ||
| Debt/EBITDA | 3.01 | ||
| Cap/Depr | 157.72% | ||
| Cap/Sales | 20.61% | ||
| Interest Coverage | 7.29 | ||
| Cash Conversion | 73.12% | ||
| Profit Quality | 61.12% | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.7 | ||
| Altman-Z | 2.23 |
F-Score6
WACC7.99%
ROIC/WACC0.63
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 5Y12.59%
Revenue 1Y (TTM)7.33%
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 5Y5.86%
EBIT growth 1Y11.11%
EBIT growth 3Y18.2%
EBIT growth 5Y11.13%
EBIT Next Year45.73%
EBIT Next 3Y20.54%
EBIT Next 5Y13.83%
FCF growth 1Y-11.93%
FCF growth 3Y3.72%
FCF growth 5Y12.37%
OCF growth 1Y22.68%
OCF growth 3Y12.63%
OCF growth 5Y12%