CANADIAN PACIFIC KANSAS CITY (CP) Stock Fundamental Analysis
USA - NYSE:CP - CA13646K1084 - Common Stock
75.47 USD
-1.27 (-1.65%)
75.64 USD
+0.17 (+0.23%)
We assign a fundamental rating of 5 out of 10 to CP. CP was compared to 42 industry peers in the Ground Transportation industry. While CP belongs to the best of the industry regarding profitability, there are concerns on its financial health. CP has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
CP had positive earnings in the past year.
CP had a positive operating cash flow in the past year.
Each year in the past 5 years CP has been profitable.
In the past 5 years CP always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of CP (4.91%) is better than 69.05% of its industry peers.
The Return On Equity of CP (9.05%) 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 61.90% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for CP is below the industry average of 7.77%.
The last Return On Invested Capital (5.25%) for CP is above the 3 year average (4.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.91% | ||
| ROE | 9.05% | ||
| ROIC | 5.25% |
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 (28.04%) is better than 95.24% of its industry peers.
CP's Profit Margin has declined in the last couple of years.
CP's Operating Margin of 36.96% is amongst the best of the industry. CP outperforms 92.86% of its industry peers.
CP's Operating Margin has declined in the last couple of years.
CP's Gross Margin of 85.09% is amongst the best of the industry. CP outperforms 95.24% 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 | 36.96% | ||
| PM (TTM) | 28.04% | ||
| GM | 85.09% |
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
CP has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
Compared to 1 year ago, CP has an improved debt to assets ratio.
2.2 Solvency
CP has an Altman-Z score of 2.21. 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 2.21. This is comparable to the rest of the industry: CP outperforms 47.62% of its industry peers.
CP has a debt to FCF ratio of 8.90. This is a slightly negative value and a sign of low solvency as CP would need 8.90 years to pay back of all of its debts.
CP has a better Debt to FCF ratio (8.90) than 69.05% of its industry peers.
CP has a Debt/Equity ratio of 0.47. This is a healthy value indicating a solid balance between debt and equity.
CP has a Debt to Equity ratio of 0.47. This is comparable to the rest of the industry: CP outperforms 45.24% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 8.9 | ||
| Altman-Z | 2.21 |
ROIC/WACC0.64
WACC8.16%
2.3 Liquidity
CP has a Current Ratio of 0.93. 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 Current ratio (0.93) than 61.90% of its industry peers.
CP has a Quick Ratio of 0.93. This is a bad value and indicates that CP is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.81, CP is not doing good in the industry: 71.43% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.81 |
3. Growth
3.1 Past
CP shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 9.31%, 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 4.77% 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)9.31%
EPS 3Y4.29%
EPS 5Y5.28%
EPS Q2Q%6.67%
Revenue 1Y (TTM)4.77%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%2.66%
3.2 Future
The Earnings Per Share is expected to grow by 12.49% 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 5.90% on average per year.
EPS Next Y14.57%
EPS Next 2Y14.73%
EPS Next 3Y14.2%
EPS Next 5Y12.49%
Revenue Next Year4.78%
Revenue Next 2Y5.55%
Revenue Next 3Y5.81%
Revenue Next 5Y5.9%
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 23.81, 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 69.05% of the companies are valued more expensively.
When comparing the Price/Earnings ratio of CP to the average of the S&P500 Index (27.29), we can say CP is valued inline with the index average.
The Price/Forward Earnings ratio is 18.91, which indicates a rather expensive current valuation of CP.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CP indicates a somewhat cheap valuation: CP is cheaper than 69.05% of the companies listed in the same industry.
CP is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 22.85, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.81 | ||
| Fwd PE | 18.91 |
4.2 Price Multiples
CP's Enterprise Value to EBITDA ratio is in line with the industry average.
66.67% 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 | 38.93 | ||
| EV/EBITDA | 15.86 |
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.
CP's earnings are expected to grow with 14.20% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.63
PEG (5Y)4.51
EPS Next 2Y14.73%
EPS Next 3Y14.2%
5. Dividend
5.1 Amount
With a yearly dividend of 0.79%, CP is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.62, CP has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, CP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
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
17.72% of the earnings are spent on dividend by CP. This is a low number and sustainable payout ratio.
CP's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP17.72%
EPS Next 2Y14.73%
EPS Next 3Y14.2%
75.47
-1.27 (-1.65%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners75.84%
Inst Owner Change0.02%
Ins Owners0.02%
Ins Owner Change0%
Market Cap69.28B
Analysts81.18
Price Target89.6 (18.72%)
Short Float %1.43%
Short Ratio4.29
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.79% |
Yearly Dividend0.54
Dividend Growth(5Y)5.07%
DP17.72%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.52%
Min EPS beat(2)-3.79%
Max EPS beat(2)-1.24%
EPS beat(4)1
Avg EPS beat(4)-2.1%
Min EPS beat(4)-4.38%
Max EPS beat(4)1.02%
EPS beat(8)3
Avg EPS beat(8)-1.12%
EPS beat(12)3
Avg EPS beat(12)-2.7%
EPS beat(16)4
Avg EPS beat(16)-3.57%
Revenue beat(2)0
Avg Revenue beat(2)-3.67%
Min Revenue beat(2)-5.44%
Max Revenue beat(2)-1.89%
Revenue beat(4)0
Avg Revenue beat(4)-3.75%
Min Revenue beat(4)-5.44%
Max Revenue beat(4)-1.89%
Revenue beat(8)0
Avg Revenue beat(8)-3.13%
Revenue beat(12)0
Avg Revenue beat(12)-3.66%
Revenue beat(16)0
Avg Revenue beat(16)-3.98%
PT rev (1m)1.25%
PT rev (3m)-0.79%
EPS NQ rev (1m)-0.66%
EPS NQ rev (3m)-1.64%
EPS NY rev (1m)0.46%
EPS NY rev (3m)-2.62%
Revenue NQ rev (1m)-0.36%
Revenue NQ rev (3m)-1.97%
Revenue NY rev (1m)-0.17%
Revenue NY rev (3m)-1.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.81 | ||
| Fwd PE | 18.91 | ||
| P/S | 6.53 | ||
| P/FCF | 38.93 | ||
| P/OCF | 17.74 | ||
| P/B | 2.11 | ||
| P/tB | 3.91 | ||
| EV/EBITDA | 15.86 |
EPS(TTM)3.17
EY4.2%
EPS(NY)3.99
Fwd EY5.29%
FCF(TTM)1.94
FCFY2.57%
OCF(TTM)4.25
OCFY5.64%
SpS11.56
BVpS35.82
TBVpS19.31
PEG (NY)1.63
PEG (5Y)4.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.91% | ||
| ROE | 9.05% | ||
| ROCE | 6.77% | ||
| ROIC | 5.25% | ||
| ROICexc | 5.3% | ||
| ROICexgc | 7.19% | ||
| OM | 36.96% | ||
| PM (TTM) | 28.04% | ||
| GM | 85.09% | ||
| FCFM | 16.77% |
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-Score8
Asset Turnover0.18
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.47 | ||
| Debt/FCF | 8.9 | ||
| Debt/EBITDA | 2.89 | ||
| Cap/Depr | 152.58% | ||
| Cap/Sales | 20.02% | ||
| Interest Coverage | 6.71 | ||
| Cash Conversion | 73.44% | ||
| Profit Quality | 59.8% | ||
| Current Ratio | 0.93 | ||
| Quick Ratio | 0.81 | ||
| Altman-Z | 2.21 |
F-Score8
WACC8.16%
ROIC/WACC0.64
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)9.31%
EPS 3Y4.29%
EPS 5Y5.28%
EPS Q2Q%6.67%
EPS Next Y14.57%
EPS Next 2Y14.73%
EPS Next 3Y14.2%
EPS Next 5Y12.49%
Revenue 1Y (TTM)4.77%
Revenue growth 3Y22.08%
Revenue growth 5Y13.3%
Sales Q2Q%2.66%
Revenue Next Year4.78%
Revenue Next 2Y5.55%
Revenue Next 3Y5.81%
Revenue Next 5Y5.9%
EBIT growth 1Y7.05%
EBIT growth 3Y18.2%
EBIT growth 5Y11.13%
EBIT Next Year44.89%
EBIT Next 3Y19.58%
EBIT Next 5Y13.69%
FCF growth 1Y-3.55%
FCF growth 3Y3.72%
FCF growth 5Y12.37%
OCF growth 1Y19.39%
OCF growth 3Y12.63%
OCF growth 5Y12%