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 41 industry peers in the Ground Transportation industry. There are concerns on the financial health of CP while its profitability can be described as average. CP has a decent growth rate and is not valued too expensively.
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
CP has a Return On Assets (4.24%) which is comparable to the rest of the industry.
Looking at the Return On Equity, with a value of 7.76%, CP is in line with its industry, outperforming 56.10% of the companies in the same industry.
CP's Return On Invested Capital of 4.92% is fine compared to the rest of the industry. CP outperforms 60.98% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for CP is below the industry average of 7.87%.
The 3 year average ROIC (4.45%) for CP is below the current ROIC(4.92%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.24% | ||
| ROE | 7.76% | ||
| ROIC | 4.92% |
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's Profit Margin of 25.56% is amongst the best of the industry. CP outperforms 92.68% of its industry peers.
In the last couple of years the Profit Margin of CP has declined.
The Operating Margin of CP (36.40%) is better than 90.24% of its industry peers.
In the last couple of years the Operating Margin of CP has declined.
CP has a better Gross Margin (84.86%) than 95.12% 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 | 36.4% | ||
| PM (TTM) | 25.56% | ||
| GM | 84.86% |
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.
CP has more shares outstanding than it did 5 years ago.
CP has a better debt/assets ratio than last year.
2.2 Solvency
CP has an Altman-Z score of 2.07. 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 (2.07) which is in line with its industry peers.
The Debt to FCF ratio of CP is 9.40, which is on the high side as it means it would take CP, 9.40 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 9.40, CP is in the better half of the industry, outperforming 65.85% of the companies in the same industry.
A Debt/Equity ratio of 0.45 indicates that CP is not too dependend on debt financing.
CP has a Debt to Equity ratio (0.45) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 9.4 | ||
| Altman-Z | 2.07 |
ROIC/WACC0.65
WACC7.59%
2.3 Liquidity
CP has a Current Ratio of 0.60. This is a bad value and indicates that CP is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 0.60, CP is doing worse than 85.37% of the companies in the same industry.
A Quick Ratio of 0.52 indicates that CP may have some problems paying its short term obligations.
With a Quick ratio value of 0.52, CP is not doing good in the industry: 82.93% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.52 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 11.23% over the past year.
CP shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 5.28% yearly.
CP shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 15.86%.
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 12.86% on average per year.
Based on estimates for the next years, CP will show a small growth in Revenue. The Revenue will grow by 6.22% on average per year.
EPS Next Y17.65%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
EPS Next 5Y12.86%
Revenue Next Year7.66%
Revenue Next 2Y7.37%
Revenue Next 3Y7.65%
Revenue Next 5Y6.22%
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.
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 23.80, the valuation of CP can be described as rather expensive.
Based on the Price/Earnings ratio, CP is valued a bit cheaper than 68.29% of the companies in the same industry.
CP is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 28.92, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 20.21 indicates a rather expensive valuation of CP.
CP's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 21.65. CP is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.8 | ||
| Fwd PE | 20.21 |
4.2 Price Multiples
CP's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. CP is more expensive than 60.98% of the companies in the same industry.
63.41% 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 | 39.31 | ||
| EV/EBITDA | 15.97 |
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)1.35
PEG (5Y)4.51
EPS Next 2Y16.41%
EPS Next 3Y15.96%
5. Dividend
5.1 Amount
CP has a yearly dividend return of 0.75%, which is pretty low.
CP's Dividend Yield is comparable with the industry average which is at 1.70.
Compared to an average S&P500 Dividend Yield of 2.51, CP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
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 19.07% 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.
DP19.07%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
73.07
+0.14 (+0.19%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners74.87%
Inst Owner Change0.05%
Ins Owners0.02%
Ins Owner Change0%
Market Cap68.23B
Analysts82.29
Price Target91.09 (24.66%)
Short Float %1.02%
Short Ratio2.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.75% |
Yearly Dividend0.55
Dividend Growth(5Y)5.07%
DP19.07%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-1.68%
Min EPS beat(2)-4.38%
Max EPS beat(2)1.02%
EPS beat(4)2
Avg EPS beat(4)-1.21%
Min EPS beat(4)-4.38%
Max EPS beat(4)2.45%
EPS beat(8)3
Avg EPS beat(8)-3.07%
EPS beat(12)4
Avg EPS beat(12)-2.99%
EPS beat(16)4
Avg EPS beat(16)-3.31%
Revenue beat(2)0
Avg Revenue beat(2)-3.83%
Min Revenue beat(2)-4.24%
Max Revenue beat(2)-3.42%
Revenue beat(4)0
Avg Revenue beat(4)-3.31%
Min Revenue beat(4)-4.24%
Max Revenue beat(4)-2.2%
Revenue beat(8)0
Avg Revenue beat(8)-3.8%
Revenue beat(12)0
Avg Revenue beat(12)-3.87%
Revenue beat(16)0
Avg Revenue beat(16)-3.99%
PT rev (1m)0.18%
PT rev (3m)-0.03%
EPS NQ rev (1m)-3.85%
EPS NQ rev (3m)-4.73%
EPS NY rev (1m)-1.14%
EPS NY rev (3m)-2.51%
Revenue NQ rev (1m)-0.77%
Revenue NQ rev (3m)-1.02%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.3%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.8 | ||
| Fwd PE | 20.21 | ||
| P/S | 6.5 | ||
| P/FCF | 39.31 | ||
| P/OCF | 17.95 | ||
| P/B | 1.97 | ||
| P/tB | 3.72 | ||
| EV/EBITDA | 15.97 |
EPS(TTM)3.07
EY4.2%
EPS(NY)3.62
Fwd EY4.95%
FCF(TTM)1.86
FCFY2.54%
OCF(TTM)4.07
OCFY5.57%
SpS11.24
BVpS37
TBVpS19.62
PEG (NY)1.35
PEG (5Y)4.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.24% | ||
| ROE | 7.76% | ||
| ROCE | 6.45% | ||
| ROIC | 4.92% | ||
| ROICexc | 4.97% | ||
| ROICexgc | 6.82% | ||
| OM | 36.4% | ||
| PM (TTM) | 25.56% | ||
| GM | 84.86% | ||
| FCFM | 16.54% |
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-Score7
Asset Turnover0.17
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.45 | ||
| Debt/FCF | 9.4 | ||
| Debt/EBITDA | 2.97 | ||
| Cap/Depr | 150.68% | ||
| Cap/Sales | 19.68% | ||
| Interest Coverage | 6.5 | ||
| Cash Conversion | 73.23% | ||
| Profit Quality | 64.71% | ||
| Current Ratio | 0.6 | ||
| Quick Ratio | 0.52 | ||
| Altman-Z | 2.07 |
F-Score7
WACC7.59%
ROIC/WACC0.65
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 Y17.65%
EPS Next 2Y16.41%
EPS Next 3Y15.96%
EPS Next 5Y12.86%
Revenue 1Y (TTM)15.86%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%2.6%
Revenue Next Year7.66%
Revenue Next 2Y7.37%
Revenue Next 3Y7.65%
Revenue Next 5Y6.22%
EBIT growth 1Y15.81%
EBIT growth 3Y18.2%
EBIT growth 5Y11.13%
EBIT Next Year49.14%
EBIT Next 3Y21.52%
EBIT Next 5Y14.37%
FCF growth 1Y46.89%
FCF growth 3Y3.72%
FCF growth 5Y12.37%
OCF growth 1Y27.36%
OCF growth 3Y12.63%
OCF growth 5Y12%