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. 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
CP had positive earnings in the past year.
In the past year CP had a positive cash flow from operations.
CP had positive earnings in each of the past 5 years.
In the past 5 years CP always reported a positive cash flow from operatings.
1.2 Ratios
CP has a Return On Assets (4.31%) which is in line with its industry peers.
CP has a Return On Equity (8.02%) which is comparable to the rest of the industry.
Looking at the Return On Invested Capital, with a value of 5.25%, CP is in the better half of the industry, outperforming 63.16% 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 last Return On Invested Capital (5.25%) for CP is above the 3 year average (4.44%), which is a sign of increasing profitability.
| 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
Looking at the Profit Margin, with a value of 24.50%, CP belongs to the top of the industry, outperforming 89.47% of the companies in the same industry.
In the last couple of years the Profit Margin of CP has declined.
With an excellent Operating Margin value of 35.89%, CP belongs to the best of the industry, outperforming 86.84% of the companies in the same industry.
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 94.74% 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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), CP is destroying value.
Compared to 1 year ago, CP has about the same amount of shares outstanding.
CP has more shares outstanding than it did 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 2.29. 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.
Looking at the Altman-Z score, with a value of 2.29, CP is in line with its industry, outperforming 47.37% of the companies in the same industry.
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.
CP has a better Debt to FCF ratio (10.52) than 63.16% of its industry peers.
A Debt/Equity ratio of 0.43 indicates that CP is not too dependend on debt financing.
The Debt to Equity ratio of CP (0.43) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 10.52 | ||
| Altman-Z | 2.29 |
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.
With a Current ratio value of 0.53, CP is not doing good in the industry: 89.47% of the companies in the same industry are doing better.
A Quick Ratio of 0.46 indicates that CP may have some problems paying its short term obligations.
CP's Quick ratio of 0.46 is on the low side compared to the rest of the industry. CP is outperformed by 89.47% 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.
The Earnings Per Share has been growing slightly by 5.28% on average over the past years.
The Revenue has grown by 15.86% in the past year. This is quite good.
CP shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 13.30% yearly.
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.
Based on estimates for the next years, CP will show a small growth in Revenue. The Revenue will grow by 5.62% on average per year.
EPS Next Y18.95%
EPS Next 2Y17.34%
EPS Next 3Y18%
EPS Next 5Y12.92%
Revenue Next Year7.99%
Revenue Next 2Y7.88%
Revenue Next 3Y8.76%
Revenue Next 5Y5.62%
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
A Price/Earnings ratio of 25.80 indicates a quite expensive valuation of CP.
CP's Price/Earnings ratio is a bit cheaper when compared to the industry. CP is cheaper than 63.16% of the companies in the same industry.
When comparing the Price/Earnings ratio of CP to the average of the S&P500 Index (29.63), we can say CP is valued inline with the index average.
Based on the Price/Forward Earnings ratio of 21.71, the valuation of CP can be described as rather expensive.
60.53% of the companies in the same industry are more expensive than CP, based on the Price/Forward Earnings ratio.
When comparing the Price/Forward Earnings ratio of CP to the average of the S&P500 Index (22.68), we can say CP is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.8 | ||
| Fwd PE | 21.71 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, CP is valued a bit more expensive than 65.79% of the companies in the same industry.
60.53% 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 | 49.28 | ||
| EV/EBITDA | 17.69 |
4.3 Compensation for Growth
The 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 18.00% in the coming years.
PEG (NY)1.36
PEG (5Y)4.89
EPS Next 2Y17.34%
EPS Next 3Y18%
5. Dividend
5.1 Amount
With a yearly dividend of 0.68%, CP is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.37, CP has a dividend in line with its industry peers.
With a Dividend Yield of 0.68, CP pays less dividend than the S&P500 average, which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
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
20.03% 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.
DP20.03%
EPS Next 2Y17.34%
EPS Next 3Y18%
77.41
-0.75 (-0.96%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners78.84%
Inst Owner Change-2.25%
Ins Owners0.02%
Ins Owner Change0%
Market Cap72.27B
Analysts81.62
Price Target89.88 (16.11%)
Short Float %1.06%
Short Ratio3.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.68% |
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)-0.36%
PT rev (3m)-3.7%
EPS NQ rev (1m)-2.08%
EPS NQ rev (3m)-1.53%
EPS NY rev (1m)-1.43%
EPS NY rev (3m)-0.1%
Revenue NQ rev (1m)-1.79%
Revenue NQ rev (3m)-1.88%
Revenue NY rev (1m)-0.34%
Revenue NY rev (3m)0.61%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.8 | ||
| Fwd PE | 21.71 | ||
| P/S | 7.11 | ||
| P/FCF | 49.28 | ||
| P/OCF | 20.96 | ||
| P/B | 2.33 | ||
| P/tB | 4.46 | ||
| EV/EBITDA | 17.69 |
EPS(TTM)3
EY3.88%
EPS(NY)3.57
Fwd EY4.61%
FCF(TTM)1.57
FCFY2.03%
OCF(TTM)3.69
OCFY4.77%
SpS10.89
BVpS33.27
TBVpS17.34
PEG (NY)1.36
PEG (5Y)4.89
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 | 2.29 |
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 Y18.95%
EPS Next 2Y17.34%
EPS Next 3Y18%
EPS Next 5Y12.92%
Revenue 1Y (TTM)15.86%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%2.6%
Revenue Next Year7.99%
Revenue Next 2Y7.88%
Revenue Next 3Y8.76%
Revenue Next 5Y5.62%
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%