Canadian Pacific Railway (TSX:CP) - Share price, News & Analysis

CP fundamental analysis
Snowflake Score
Valuation	3/6
Future Growth	4/6
Past Performance	3/6
Financial Health	2/6
Dividends	0/6

CP Stock Overview

Canadian Pacific Railway Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States.

Rewards

Trading at 32.6% below our estimate of its fair value

Earnings are forecast to grow 17.64% per year

Earnings have grown 9.9% per year over the past 5 years

Risk Analysis

Debt is not well covered by operating cash flow

Shareholders have been diluted in the past year

Canadian Pacific Railway Competitors

Canadian National Railway

TSX:CNR

CA$99.0b

CSX

NasdaqGS:CSX

US$67.4b

Norfolk Southern

NYSE:NSC

US$54.5b

Price History & Performance

Summary of all time highs, changes and price drops for Canadian Pacific Railway
Historical stock prices
Current Share Price	CA$88.34
52 Week High	CA$105.46
52 Week Low	CA$82.12
Beta	0.81
1 Month Change	-9.71%
3 Month Change	-4.32%
1 Year Change	-9.65%
3 Year Change	47.13%
5 Year Change	106.65%
Change since IPO	1,348.20%

Recent News & Updates

May 17

Are Investors Undervaluing Canadian Pacific Railway Limited (TSE:CP) By 31%?

Today we will run through one way of estimating the intrinsic value of Canadian Pacific Railway Limited ( TSE:CP ) by...

Shareholder Returns

	CP	CA Transportation	CA Market
7D	-1.3%	-0.6%	0.8%
1Y	-9.6%	0.2%	4.8%

Return vs Industry: CP underperformed the Canadian Transportation industry which returned 0.2% over the past year.

Return vs Market: CP underperformed the Canadian Market which returned 4.8% over the past year.

Price Volatility

Is CP's price volatile compared to industry and market?
CP volatility
CP Average Weekly Movement	4.1%
Transportation Industry Average Movement	4.8%
Market Average Movement	9.9%
10% most volatile stocks in CA Market	16.9%
10% least volatile stocks in CA Market	4.4%

Stable Share Price: CP is less volatile than 75% of Canadian stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: CP's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1881	11,942	Keith Creel	https://www.cpr.ca

Canadian Pacific Railway Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; and merchandise freight, such as energy, chemicals and plastics, metals, minerals and consumer, automotive, and forest products. It also transports intermodal traffic comprising retail goods in overseas containers.

Canadian Pacific Railway Fundamentals Summary

How do Canadian Pacific Railway's earnings and revenue compare to its market cap?
CP fundamental statistics
Market Cap	CA$82.15b
Earnings (TTM)	CA$2.84b
Revenue (TTM)	CA$7.87b

28.9x

P/E Ratio

10.4x

P/S Ratio

Is CP overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
CP income statement (TTM)
Revenue	CA$7.87b
Cost of Revenue	CA$3.40b
Gross Profit	CA$4.47b
Other Expenses	CA$1.63b
Earnings	CA$2.84b

Last Reported Earnings

Mar 31, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	3.05
Gross Margin	56.79%
Net Profit Margin	36.07%
Debt/Equity Ratio	57.9%

How did CP perform over the long term?

See historical performance and comparison

Dividends

0.9%

Current Dividend Yield

20%

Payout Ratio

Does CP pay a reliable dividends?

See CP dividend history and benchmarks

When do you need to buy CP by to receive an upcoming dividend?
Canadian Pacific Railway dividend dates
Ex Dividend Date	Jun 23 2022
Dividend Pay Date	Jul 25 2022
Days until Ex dividend	32 days
Days until Dividend pay date	64 days

Does CP pay a reliable dividends?

See CP dividend history and benchmarks

Valuation

Is Canadian Pacific Railway undervalued compared to its fair value and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

Below Fair Value
Significantly Below Fair Value
PE vs Industry
PE vs Market
PEG Ratio
PB vs Industry

32.5%

Undervalued compared to fair value

Share Price vs. Fair Value

Below Fair Value: CP (CA$88.34) is trading below our estimate of fair value (CA$131.08)

Significantly Below Fair Value: CP is trading below fair value by more than 20%.

Price To Earnings Ratio

PE vs Industry: CP is poor value based on its PE Ratio (28.9x) compared to the Canadian Transportation industry average (15.1x).

PE vs Market: CP is poor value based on its PE Ratio (28.9x) compared to the Canadian market (11.5x).

Price to Earnings Growth Ratio

PEG Ratio: CP is poor value based on its PEG Ratio (1.6x)

Price to Book Ratio

PB vs Industry: CP is good value based on its PB Ratio (2.4x) compared to the CA Transportation industry average (2.8x).

Future Growth

How is Canadian Pacific Railway forecast to perform in the next 1 to 3 years based on estimates from 22 analysts?

Future Growth Score

4/6

Future Growth Score 4/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

17.6%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: CP's forecast earnings growth (17.6% per year) is above the savings rate (1.6%).

Earnings vs Market: CP's earnings (17.6% per year) are forecast to grow faster than the Canadian market (7.5% per year).

High Growth Earnings: CP's earnings are forecast to grow, but not significantly.

Revenue vs Market: CP's revenue (25.2% per year) is forecast to grow faster than the Canadian market (6.4% per year).

High Growth Revenue: CP's revenue (25.2% per year) is forecast to grow faster than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: CP's Return on Equity is forecast to be low in 3 years time (13.6%).

Past Performance

How has Canadian Pacific Railway performed over the past 5 years?

Past Performance Score

3/6

Past Performance Score 3/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

9.9%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: CP has high quality earnings.

Growing Profit Margin: CP's current net profit margins (36.1%) are higher than last year (34.6%).

Past Earnings Growth Analysis

Earnings Trend: CP's earnings have grown by 9.9% per year over the past 5 years.

Accelerating Growth: CP's earnings growth over the past year (7.7%) is below its 5-year average (9.9% per year).

Earnings vs Industry: CP earnings growth over the past year (7.7%) underperformed the Transportation industry 37.1%.

Return on Equity

High ROE: CP's Return on Equity (8.4%) is considered low.

Financial Health

How is Canadian Pacific Railway's financial position?

Financial Health Score

2/6

Financial Health Score 2/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: CP's short term assets (CA$1.4B) do not cover its short term liabilities (CA$3.2B).

Long Term Liabilities: CP's short term assets (CA$1.4B) do not cover its long term liabilities (CA$30.4B).

Debt to Equity History and Analysis

Debt Level: CP's net debt to equity ratio (57.6%) is considered high.

Reducing Debt: CP's debt to equity ratio has reduced from 172.2% to 57.9% over the past 5 years.

Debt Coverage: CP's debt is not well covered by operating cash flow (18.9%).

Interest Coverage: CP's interest payments on its debt are well covered by EBIT (7.2x coverage).

Balance Sheet

Dividend

What is Canadian Pacific Railway current dividend yield, its reliability and sustainability?

Dividend Score

0/6

Dividend Score 0/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Future Dividend Coverage

0.86%

Current Dividend Yield

Upcoming Dividend Payment

Dividend Yield vs Market

Notable Dividend: CP's dividend (0.86%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (1.91%).

High Dividend: CP's dividend (0.86%) is low compared to the top 25% of dividend payers in the Canadian market (4.91%).

Stability and Growth of Payments

Stable Dividend: CP is not paying a notable dividend for the Canadian market, therefore no need to check if payments are stable.

Growing Dividend: CP is not paying a notable dividend for the Canadian market, therefore no need to check if payments are increasing.

Earnings Payout to Shareholders

Earnings Coverage: CP is not paying a notable dividend for the Canadian market.

Cash Payout to Shareholders

Cash Flow Coverage: CP is not paying a notable dividend for the Canadian market.

Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

5.3yrs

Average management tenure

CEO

Keith Creel (52 yo)

9.25yrs

Tenure

CA$26,728,981

Compensation

Mr. Keith E. Creel serves as President and Chief Executive Officer of Canadian Pacific Railway Co. (“CP”) since February 5, 2013 and January 31, 2017 respectively. Mr. Creel is responsible for providing le...

CEO Compensation Analysis

Compensation vs Market: Keith's total compensation ($USD20.82M) is above average for companies of similar size in the Canadian market ($USD7.51M).

Compensation vs Earnings: Keith's compensation has increased by more than 20% in the past year.

Leadership Team

Experienced Management: CP's management team is seasoned and experienced (5.3 years average tenure).

Board Members

Experienced Board: CP's board of directors are considered experienced (5.7 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have been diluted in the past year, with total shares outstanding growing by 39.5%.

Data	Last Updated (UTC time)
Company Analysis	2022/05/21 00:00
End of Day Share Price	2022/05/20 00:00
Earnings	2022/03/31
Annual Earnings	2021/12/31