TSX:CP

Stock Analysis Report

Canadian Pacific Railway

Executive Summary

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


Snowflake Analysis

Solid track record with limited growth.


Similar Companies

Share Price & News

How has Canadian Pacific Railway's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: CP has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

9.7%

CP

5.9%

CA Transportation

7.1%

CA Market


1 Year Return

6.8%

CP

-8.5%

CA Transportation

-25.3%

CA Market

Return vs Industry: CP exceeded the Canadian Transportation industry which returned -8.5% over the past year.

Return vs Market: CP exceeded the Canadian Market which returned -25.3% over the past year.


Shareholder returns

CPIndustryMarket
7 Day9.7%5.9%7.1%
30 Day-11.6%-12.8%-24.1%
90 Day-11.5%-13.8%-26.7%
1 Year8.0%6.8%-6.9%-8.5%-22.9%-25.3%
3 Year55.3%50.5%21.2%15.5%-15.6%-23.4%
5 Year33.3%26.8%33.0%10.5%-3.2%-17.5%

Price Volatility Vs. Market

How volatile is Canadian Pacific Railway's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

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

16.73x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CP (CA$294.04) is trading above our estimate of fair value (CA$216.47)

Significantly Below Fair Value: CP is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: CP is good value based on its PE Ratio (16.7x) compared to the Transportation industry average (16.7x).

PE vs Market: CP is poor value based on its PE Ratio (16.7x) compared to the Canadian market (10.6x).


Price to Earnings Growth Ratio

PEG Ratio: CP is poor value based on its PEG Ratio (3.7x)


Price to Book Ratio

PB vs Industry: CP is overvalued based on its PB Ratio (5.7x) compared to the CA Transportation industry average (2.9x).


Next Steps

Future Growth

How is Canadian Pacific Railway forecast to perform in the next 1 to 3 years based on estimates from 25 analysts?

4.5%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CP's forecast earnings growth (4.5% per year) is above the savings rate (1.4%).

Earnings vs Market: CP's earnings (4.5% per year) are forecast to grow slower than the Canadian market (7.8% per year).

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

Revenue vs Market: CP's revenue (3.8% per year) is forecast to grow slower than the Canadian market (3.9% per year).

High Growth Revenue: CP's revenue (3.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: CP's Return on Equity is forecast to be high in 3 years time (30%)


Next Steps

Past Performance

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

11.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: CP has high quality earnings.

Growing Profit Margin: CP's current net profit margins (31.3%) are higher than last year (26.7%).


Past Earnings Growth Analysis

Earnings Trend: CP's earnings have grown by 11.6% per year over the past 5 years.

Accelerating Growth: CP's earnings growth over the past year (25.1%) exceeds its 5-year average (11.6% per year).

Earnings vs Industry: CP earnings growth over the past year (25.1%) exceeded the Transportation industry -6.7%.


Return on Equity

High ROE: Whilst CP's Return on Equity (34.52%) is high, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Canadian Pacific Railway's financial position?


Financial Position Analysis

Short Term Liabilities: CP's short term assets (CA$1.2B) do not cover its short term liabilities (CA$2.3B).

Long Term Liabilities: CP's short term assets (CA$1.2B) do not cover its long term liabilities (CA$13.0B).


Debt to Equity History and Analysis

Debt Level: CP's debt to equity ratio (121.7%) is considered high.

Reducing Debt: CP's debt to equity ratio has increased from 103.3% to 121.7% over the past 5 years.

Debt Coverage: CP's debt is well covered by operating cash flow (34.7%).

Interest Coverage: CP's interest payments on its debt are well covered by EBIT (7.8x coverage).


Balance Sheet

Inventory Level: CP has a high level of physical assets or inventory.

Debt Coverage by Assets: CP's debt is not covered by short term assets (assets are 0.1x debt).


Next Steps

Dividend

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

1.13%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: CP's dividend (1.13%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.75%).

High Dividend: CP's dividend (1.13%) is low compared to the top 25% of dividend payers in the Canadian market (8.79%).


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.


Current Payout to Shareholders

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


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of CP's dividend in 3 years as they are not forecast to pay a notable one for the Canadian market.


Next Steps

Management

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

3.3yrs

Average management tenure


CEO

Keith Creel (50yo)

3.17s

Tenure

CA$15,150,402

Compensation

Mr. Keith E. Creel serves as President and Chief Executive Officer of Canadian Pacific Railway Co. (“CP”) On January 31, 2017, where he is responsible for providing leadership and strategic vision for CP l ...


CEO Compensation Analysis

Compensation vs Market: Keith's total compensation ($USD10.77M) is above average for companies of similar size in the Canadian market ($USD6.69M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Keith Creel
President3.17yrsCA$15.15m0.013% CA$5.1m
Nadeem Velani
Executive VP & CFO3.42yrsCA$4.72m0.00042% CA$168.9k
Mark Redd
Executive Vice President of Operations0.50yrCA$2.39m0.00032% CA$128.7k
John Brooks
Executive VP & Chief Marketing Officer3yrsCA$3.76m0.0013% CA$538.8k
Laird Pitz
Senior VP & Chief Risk Officer5.42yrsCA$2.56m0.000020% CA$8.0k
Ian Gray
Vice President of Financial Planning & Accounting2.17yrsno data0.000050% CA$20.1k
Michael Redeker
Chief Information Officer & VP7.42yrsno data0.0021% CA$844.4k
Maeghan Albiston
Assistant Vice President of Investor Relations3.5yrsno datano data
Jeffrey Ellis
Chief Legal Officer & Corporate Secretary4.33yrsCA$1.58m0.00050% CA$201.0k
Chad Rolstad
VP of Human Resources & Chief Culture Officer1yrno data0.00024% CA$96.5k

3.3yrs

Average Tenure

49yo

Average Age

Experienced Management: CP's management team is considered experienced (3.3 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Keith Creel
President3.17yrsCA$15.15m0.013% CA$5.1m
Matthew Paull
Independent Director4.17yrsCA$305.81k0.0022% CA$880.6k
Edward Monser
Independent Director1.25yrsCA$266.09kno data
Isabelle Courville
Independent Chairman0.83yrCA$440.37k0.00066% CA$265.4k
Gordon Trafton
Independent Director3.17yrsCA$285.78kno data
Ubavka MacDonald
Independent Director7.83yrsCA$301.69kno data
Jane Peverett
Independent Director3.25yrsCA$301.69kno data
Gillian Denham
Independent Director3.5yrsCA$262.47kno data
John Baird
Independent Director4.83yrsCA$262.47kno data
Andrea Robertson
Independent Director0.67yrCA$120.16kno data

3.4yrs

Average Tenure

59.5yo

Average Age

Experienced Board: CP's board of directors are considered experienced (3.4 years average tenure).


Ownership

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


Insider Trading Volume

Insider Buying: CP insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Canadian Pacific Railway Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Canadian Pacific Railway Limited
  • Ticker: CP
  • Exchange: TSX
  • Founded: 1881
  • Industry: Railroads
  • Sector: Transportation
  • Market Cap: CA$40.210b
  • Shares outstanding: 136.75m
  • Website: https://www.cpr.ca

Number of Employees


Location

  • Canadian Pacific Railway Limited
  • 7550 Ogden Dale Road SE
  • Calgary
  • Alberta
  • T2C 4X9
  • Canada

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
CPTSX (The Toronto Stock Exchange)YesCommon SharesCACADAug 2001
CPNYSE (New York Stock Exchange)YesCommon SharesUSUSDAug 2001
PC8DB (Deutsche Boerse AG)YesCommon SharesDEEURAug 2001
CPRL34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH REP 0.25 COM NPVBRBRLMay 2019

Biography

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. The company offers rail and intermodal transportation services through a network of approximately 12,700 miles serving business centers in Quebec and British Columbia, Canada; and the United States Northeast and Midwest regions. Canadian Pacific Railway Limited was founded in 1881 and is headquartered in Calgary, Canada. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/03/29 01:33
End of Day Share Price2020/03/27 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.