CANADIAN PACIFIC KANSAS CITY (CP) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:CP - CA13646K1084 - Common Stock
72.75 USD
+0.2 (+0.28%)
72.75 USD
0 (0%)
Overall CP gets a fundamental rating of 5 out of 10. We evaluated CP against 42 industry peers in the Ground Transportation industry. CP has an excellent profitability rating, but there are concerns on its financial health. CP is not valued too expensively and it also shows a decent 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.
- Each year in the past 5 years CP had a positive operating cash flow.
1.2 Ratios
- The Return On Assets of CP (4.92%) is better than 71.43% of its industry peers.
- CP's Return On Equity of 9.33% is fine compared to the rest of the industry. CP outperforms 61.90% of its industry peers.
- The Return On Invested Capital of CP (5.27%) is better than 66.67% 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 6.92%.
- The last Return On Invested Capital (5.27%) for CP is above the 3 year average (4.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.92% | ||
| ROE | 9.33% | ||
| ROIC | 5.27% |
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
- The Profit Margin of CP (28.38%) is better than 92.86% of its industry peers.
- In the last couple of years the Profit Margin of CP has declined.
- The Operating Margin of CP (37.47%) is better than 95.24% of its industry peers.
- CP's Operating Margin has declined in the last couple of years.
- Looking at the Gross Margin, with a value of 85.12%, CP belongs to the top of the industry, outperforming 97.62% of the companies in the same industry.
- 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 | 37.47% | ||
| PM (TTM) | 28.38% | ||
| GM | 85.12% |
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
- 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.
- Compared to 5 years ago, CP has more shares outstanding
- CP has a better debt/assets ratio than last year.
2.2 Solvency
- CP has an Altman-Z score of 1.98. 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.
- The Altman-Z score of CP (1.98) is comparable to the rest of the industry.
- CP has a debt to FCF ratio of 9.98. This is a negative value and a sign of low solvency as CP would need 9.98 years to pay back of all of its debts.
- CP has a Debt to FCF ratio of 9.98. This is in the better half of the industry: CP outperforms 69.05% of its industry peers.
- CP has a Debt/Equity ratio of 0.51. This is a neutral value indicating CP is somewhat dependend on debt financing.
- CP has a Debt to Equity ratio (0.51) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.51 | ||
| Debt/FCF | 9.98 | ||
| Altman-Z | 1.98 |
ROIC/WACC0.59
WACC8.91%
2.3 Liquidity
- A Current Ratio of 0.63 indicates that CP may have some problems paying its short term obligations.
- CP has a worse Current ratio (0.63) than 88.10% of its industry peers.
- CP has a Quick Ratio of 0.63. 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 worse Quick ratio (0.54) than 88.10% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.63 | ||
| Quick Ratio | 0.54 |
3. Growth
3.1 Past
- CP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.12%, which is quite good.
- The Earnings Per Share has been growing slightly by 5.28% on average over the past years.
- Looking at the last year, CP shows a small growth in Revenue. The Revenue has grown by 4.02% 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)10.12%
EPS 3Y4.29%
EPS 5Y5.28%
EPS Q2Q%11.11%
Revenue 1Y (TTM)4.02%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%3.16%
3.2 Future
- The Earnings Per Share is expected to grow by 12.35% 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 5.81% on average per year.
EPS Next Y12.52%
EPS Next 2Y12.98%
EPS Next 3Y12.99%
EPS Next 5Y12.35%
Revenue Next Year4.25%
Revenue Next 2Y5.25%
Revenue Next 3Y5.81%
Revenue Next 5Y5.81%
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 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 21.85, the valuation of CP can be described as rather expensive.
- Based on the Price/Earnings ratio, CP is valued a bit cheaper than the industry average as 76.19% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 28.87. CP is valued slightly cheaper when compared to this.
- Based on the Price/Forward Earnings ratio of 18.35, the valuation of CP can be described as rather expensive.
- Based on the Price/Forward Earnings ratio, CP is valued cheaper than 80.95% of the companies in the same industry.
- CP's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 25.96.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.85 | ||
| Fwd PE | 18.35 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as CP.
- 73.81% of the companies in the same industry are more expensive than CP, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 37.4 | ||
| EV/EBITDA | 14.59 |
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 12.99% in the coming years.
PEG (NY)1.75
PEG (5Y)4.14
EPS Next 2Y12.98%
EPS Next 3Y12.99%
5. Dividend
5.1 Amount
- With a yearly dividend of 0.88%, CP is not a good candidate for dividend investing.
- Compared to an average industry Dividend Yield of 0.69, CP pays a bit more dividend than its industry peers.
- Compared to an average S&P500 Dividend Yield of 1.82, CP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.88% |
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.
- The dividend of CP decreased recently.
Dividend Growth(5Y)5.07%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
- 18.03% 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.
DP18.03%
EPS Next 2Y12.98%
EPS Next 3Y12.99%
CANADIAN PACIFIC KANSAS CITY / CP FAQ
Can you provide the ChartMill fundamental rating for CANADIAN PACIFIC KANSAS CITY?
ChartMill assigns a fundamental rating of 5 / 10 to CP.
What is the valuation status of CANADIAN PACIFIC KANSAS CITY (CP) stock?
ChartMill assigns a valuation rating of 5 / 10 to CANADIAN PACIFIC KANSAS CITY (CP). This can be considered as Fairly Valued.
What is the profitability of CP stock?
CANADIAN PACIFIC KANSAS CITY (CP) has a profitability rating of 7 / 10.
What are the PE and PB ratios of CANADIAN PACIFIC KANSAS CITY (CP) stock?
The Price/Earnings (PE) ratio for CANADIAN PACIFIC KANSAS CITY (CP) is 21.85 and the Price/Book (PB) ratio is 1.96.
Can you provide the financial health for CP stock?
The financial health rating of CANADIAN PACIFIC KANSAS CITY (CP) is 3 / 10.