CANADIAN PACIFIC KANSAS CITY (CP) Stock Fundamental Analysis
NYSE:CP - New York Stock Exchange, Inc. - CA13646K1084 - Common Stock
CP gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 38 industry peers in the Ground Transportation industry. While CP has a great profitability rating, there are quite some concerns on its financial health. While showing a medium growth rate, CP is valued expensive at the moment.
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.
In the past 5 years CP always reported a positive cash flow from operatings.
1.2 Ratios
The Return On Assets of CP (4.31%) is comparable to the rest of the industry.
CP has a Return On Equity (8.02%) which is in line with its industry peers.
With a decent Return On Invested Capital value of 5.73%, CP is doing good in 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 (5.73%) for CP is above the 3 year average (4.45%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.31% | ||
| ROE | 8.02% | ||
| ROIC | 5.73% |
ROA(3y)4.63%
ROA(5y)7.03%
ROE(3y)8.98%
ROE(5y)18.97%
ROIC(3y)4.45%
ROIC(5y)7.82%
1.3 Margins
Looking at the Profit Margin, with a value of 24.50%, CP belongs to the top of the industry, outperforming 86.84% of the companies in the same industry.
CP's Profit Margin has improved in the last couple of years.
CP's Operating Margin of 35.89% is amongst the best of the industry. CP outperforms 86.84% of its industry peers.
CP's Operating Margin has been stable in the last couple of years.
CP's Gross Margin of 84.49% is amongst the best of the industry. CP outperforms 94.74% of its industry peers.
CP's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 35.89% | ||
| PM (TTM) | 24.5% | ||
| GM | 84.49% |
OM growth 3Y-5.35%
OM growth 5Y-0.96%
PM growth 3Y-0.44%
PM growth 5Y3.24%
GM growth 3Y-1.86%
GM growth 5Y-0.2%
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.
CP has more shares outstanding than it did 5 years ago.
CP has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 2.31 indicates that CP is not a great score, but indicates only limited risk for bankruptcy at the moment.
With a Altman-Z score value of 2.31, CP perfoms like the industry average, outperforming 50.00% 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.
With a decent Debt to FCF ratio value of 10.52, CP is doing good in the industry, outperforming 63.16% of the companies in the same industry.
CP has a Debt/Equity ratio of 0.43. This is a healthy value indicating a solid balance between debt and equity.
With a Debt to Equity ratio value of 0.43, CP perfoms like the industry average, outperforming 57.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.43 | ||
| Debt/FCF | 10.52 | ||
| Altman-Z | 2.31 |
ROIC/WACC0.81
WACC7.05%
2.3 Liquidity
CP has a Current Ratio of 0.53. 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 (0.53) than 92.11% of its industry peers.
A Quick Ratio of 0.46 indicates that CP may have some problems paying its short term obligations.
The Quick ratio of CP (0.46) is worse than 92.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.53 | ||
| Quick Ratio | 0.46 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an nice 10.67% over the past year.
The Earnings Per Share has been growing slightly by 5.68% on average over the past years.
Looking at the last year, CP shows a very strong growth in Revenue. The Revenue has grown by 28.53%.
CP shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.41% yearly.
EPS 1Y (TTM)10.67%
EPS 3Y2.72%
EPS 5Y5.68%
EPS Q2Q%7.61%
Revenue 1Y (TTM)28.53%
Revenue growth 3Y17.65%
Revenue growth 5Y11.41%
Sales Q2Q%6.29%
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 15.31% on average per year.
CP is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 8.51% yearly.
EPS Next Y14.04%
EPS Next 2Y15.85%
EPS Next 3Y15.86%
EPS Next 5Y15.31%
Revenue Next Year10.61%
Revenue Next 2Y9.36%
Revenue Next 3Y8.92%
Revenue Next 5Y8.51%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
With a Price/Earnings ratio of 27.32, CP can be considered very expensive at the moment.
CP's Price/Earnings ratio is in line with the industry average.
When comparing the Price/Earnings ratio of CP to the average of the S&P500 Index (28.29), we can say CP is valued inline with the index average.
The Price/Forward Earnings ratio is 22.04, which indicates a rather expensive current valuation of CP.
Based on the Price/Forward Earnings ratio, CP is valued a bit cheaper than 60.53% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.44, CP is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.32 | ||
| Fwd PE | 22.04 |
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 63.16% of the companies listed in the same industry.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of CP indicates a somewhat cheap valuation: CP is cheaper than 63.16% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 50.74 | ||
| EV/EBITDA | 17.83 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of CP may justify a higher PE ratio.
CP's earnings are expected to grow with 15.86% in the coming years. This may justify a more expensive valuation.
PEG (NY)1.95
PEG (5Y)4.81
EPS Next 2Y15.85%
EPS Next 3Y15.86%
5. Dividend
5.1 Amount
With a yearly dividend of 0.71%, CP is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.27, CP has a dividend in line with its industry peers.
Compared to an average S&P500 Dividend Yield of 2.28, CP's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
5.2 History
The dividend of CP is nicely growing with an annual growth rate of 9.27%!
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)9.27%
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 2Y15.85%
EPS Next 3Y15.86%
CANADIAN PACIFIC KANSAS CITY
NYSE:CP (1/22/2025, 5:05:00 PM)
After market: 78.42 0 (0%)78.42
+0.74 (+0.95%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupTransportation
GICS IndustryGround Transportation
Earnings (Last)
Earnings (Next)
Inst Owners78.84%
Inst Owner Change-0.08%
Ins Owners0.02%
Ins Owner Change0%
Market Cap73.19B
Analysts79.46
Price Target90.2 (15.02%)
Short Float %0.76%
Short Ratio2.31
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.71% |
Yearly Dividend0.76
Dividend Growth(5Y)9.27%
DP20.03%
Div Incr Years0
Div Non Decr Years1
Ex-DateN/A
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)-2.51%
PT rev (3m)-4.46%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-1.89%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.97%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-0.9%
Revenue NY rev (1m)-0.1%
Revenue NY rev (3m)-1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.32 | ||
| Fwd PE | 22.04 | ||
| P/S | 7.32 | ||
| P/FCF | 50.74 | ||
| P/OCF | 21.58 | ||
| P/B | 2.4 | ||
| P/tB | 4.6 | ||
| EV/EBITDA | 17.83 |
EPS(TTM)2.87
EY3.66%
EPS(NY)3.56
Fwd EY4.54%
FCF(TTM)1.55
FCFY1.97%
OCF(TTM)3.63
OCFY4.63%
SpS10.71
BVpS32.74
TBVpS17.07
PEG (NY)1.95
PEG (5Y)4.81
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.31% | ||
| ROE | 8.02% | ||
| ROCE | 6.79% | ||
| ROIC | 5.73% | ||
| ROICexc | 5.76% | ||
| ROICexgc | 7.97% | ||
| OM | 35.89% | ||
| PM (TTM) | 24.5% | ||
| GM | 84.49% | ||
| FCFM | 14.42% |
ROA(3y)4.63%
ROA(5y)7.03%
ROE(3y)8.98%
ROE(5y)18.97%
ROIC(3y)4.45%
ROIC(5y)7.82%
ROICexc(3y)4.47%
ROICexc(5y)7.87%
ROICexgc(3y)5.14%
ROICexgc(5y)8.34%
ROCE(3y)5.28%
ROCE(5y)9.43%
ROICexcg growth 3Y-18.38%
ROICexcg growth 5Y-10.46%
ROICexc growth 3Y-26.32%
ROICexc growth 5Y-15.9%
OM growth 3Y-5.35%
OM growth 5Y-0.96%
PM growth 3Y-0.44%
PM growth 5Y3.24%
GM growth 3Y-1.86%
GM growth 5Y-0.2%
F-Score6
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 | 2.31 |
F-Score6
WACC7.05%
ROIC/WACC0.81
Cap/Depr(3y)177.8%
Cap/Depr(5y)196.24%
Cap/Sales(3y)18.91%
Cap/Sales(5y)19.91%
Profit Quality(3y)63.6%
Profit Quality(5y)58.43%
High Growth Momentum
Growth
EPS 1Y (TTM)10.67%
EPS 3Y2.72%
EPS 5Y5.68%
EPS Q2Q%7.61%
EPS Next Y14.04%
EPS Next 2Y15.85%
EPS Next 3Y15.86%
EPS Next 5Y15.31%
Revenue 1Y (TTM)28.53%
Revenue growth 3Y17.65%
Revenue growth 5Y11.41%
Sales Q2Q%6.29%
Revenue Next Year10.61%
Revenue Next 2Y9.36%
Revenue Next 3Y8.92%
Revenue Next 5Y8.51%
EBIT growth 1Y26.89%
EBIT growth 3Y11.36%
EBIT growth 5Y10.34%
EBIT Next Year46.46%
EBIT Next 3Y22.71%
EBIT Next 5Y17.14%
FCF growth 1Y31.32%
FCF growth 3Y13.14%
FCF growth 5Y7.13%
OCF growth 1Y61.96%
OCF growth 3Y13.87%
OCF growth 5Y8.81%