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

Fundamentals

Proven 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


Market Performance


7 Day Return

-0.5%

CP

-0.1%

CA Transportation

-0.2%

CA Market


1 Year Return

8.7%

CP

3.9%

CA Transportation

1.1%

CA Market

Return vs Industry: CP exceeded the Canadian Transportation industry which returned 3.9% over the past year.

Return vs Market: CP exceeded the Canadian Market which returned 1.1% over the past year.


Shareholder returns

CPIndustryMarket
7 Day-0.5%-0.1%-0.2%
30 Day-7.5%-6.2%-3.3%
90 Day-9.0%-5.4%-1.6%
1 Year9.9%8.7%5.6%3.9%4.6%1.1%
3 Year49.4%44.8%40.2%33.8%13.1%3.1%
5 Year29.3%23.3%47.5%36.8%24.7%6.7%

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?

17.22x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: CP (CA$283.84) is trading above our estimate of fair value (CA$255.96)

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 (17.2x) compared to the Transportation industry average (17.5x).

PE vs Market: CP is poor value based on its PE Ratio (17.2x) compared to the Canadian market (13.7x).


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 (5.5x) compared to the CA Transportation industry average (2.3x).


Next Steps

Future Growth

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

4.7%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: CP's forecast earnings growth (4.7% per year) is above the savings rate (1.9%).

Earnings vs Market: CP's earnings (4.7% per year) are forecast to grow slower than the Canadian market (13.6% per year).

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

Revenue vs Market: CP's revenue (4.9% per year) is forecast to grow slower than the Canadian market (5.7% per year).

High Growth Revenue: CP's revenue (4.9% 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 (31.2%)


Next Steps

Past Performance

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

13.4%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: CP's earnings have grown by 13.4% per year over the past 5 years.

Accelerating Growth: CP's earnings growth over the past year (2.1%) is below its 5-year average (13.4% per year).

Earnings vs Industry: CP earnings growth over the past year (2.1%) exceeded the Transportation industry -34%.


Return on Equity

High ROE: Whilst CP's Return on Equity (32.49%) is high, this metric is skewed due to their high level of debt.


Return on Assets

ROA vs Industry: CP has a higher Return on Assets than the Transportation industry average last year.


Return on Capital Employed

ROCE Improving: CP has improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Canadian Pacific Railway's financial position?


Financial Position Analysis

Short Term Liabilities: CP's short term assets (CA$1.1B) do not cover its short term liabilities (CA$1.7B)

Long Term Liabilities: CP's short term assets (1.1B) do not cover its long term liabilities (13.1B)


Debt to Equity History and Analysis

Debt Level: CP's debt to equity ratio (117.1%) is considered high

Reducing Debt: CP's debt to equity ratio has increased from 66.2% to 117.1% over the past 5 years.

Debt Coverage: CP's debt is well covered by operating cash flow (32.7%).

Interest Coverage: CP's interest payments on its debt are well covered by EBIT (7.6x 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?

1.17%

Current Dividend Yield


Dividend Yield vs Market

company1.2%marketbottom25%2.0%markettop25%6.0%industryaverage1.8%forecastin3Years1.2%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: CP's dividend (1.17%) isn’t notable compared to the bottom 25% of dividend payers in the Canadian market (2.04%).

High Dividend: CP's dividend (1.17%) is low compared to the top 25% of dividend payers in the Canadian market (6.03%).

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

What is the CEO of Canadian Pacific Railway's salary, the management and board of directors tenure and is there insider trading?

2.9yrs

Average management tenure


CEO

Keith Creel (50yo)

2.8yrs

Tenure

CA$12,486,607

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 ($USD9.51M) is about average for companies of similar size in the Canadian market ($USD7.04M).

Compensation vs Earnings: Keith's compensation has been consistent with company performance over the past year.


Management Age and Tenure

2.9yrs

Average Tenure

50yo

Average Age

Experienced Management: CP's management team is considered experienced (2.9 years average tenure).


Board Age and Tenure

3.0yrs

Average Tenure

60yo

Average Age

Experienced Board: CP's board of directors are not considered experienced ( 3 years average tenure), which suggests a new board.


Insider Trading

Insider Buying: CP insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellCA$72,45715 Aug 19
Michael Redeker
EntityIndividual
Role
Chief Information Officer
Chief Information Officer & VP
Shares230
Max PriceCA$315.03
SellCA$165,96319 Jul 19
Jeffrey Ellis
EntityIndividual
Role
Chief Legal Officer
Chief Legal Officer & Corporate Secretary
Shares520
Max PriceCA$319.16
SellCA$3,675,46719 Jul 19
Laird Pitz
EntityIndividual
Role
Senior Key Executive
Senior VP & Chief Risk Officer
Shares11,676
Max PriceCA$314.79
SellCA$280,82319 Jul 19
John Brooks
EntityIndividual
Role
Head of Marketing
Executive VP & Chief Marketing Officer
Shares900
Max PriceCA$312.03
SellCA$971,32325 Jan 19
Andrew Reardon
EntityIndividual
Shares3,578
Max PriceCA$271.47
BuyCA$485,20120 Dec 18
Matthew Paull
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,000
Max PriceCA$242.60
BuyCA$33,70601 Nov 18
Chad Rolstad
EntityIndividual
Role
Head of Human Resources
VP of Human Resources & Chief Culture Officer
Shares125
Max PriceCA$269.64

Ownership Breakdown


Management Team

  • Keith Creel (50yo)

    President

    • Tenure: 2.8yrs
    • Compensation: CA$12.49m
  • Mark Redd

    Executive Vice President of Operations

    • Tenure: 0.08yrs
  • Mike Redeker (58yo)

    Chief Information Officer & VP

    • Tenure: 7yrs
  • Jeff Ellis (51yo)

    Chief Legal Officer & Corporate Secretary

    • Tenure: 3.9yrs
    • Compensation: CA$1.58m
  • John Brooks (48yo)

    Executive VP & Chief Marketing Officer

    • Tenure: 2.7yrs
    • Compensation: CA$2.00m
  • Laird Pitz (74yo)

    Senior VP & Chief Risk Officer

    • Tenure: 5yrs
    • Compensation: CA$1.87m
  • Nadeem Velani (46yo)

    Executive VP & CFO

    • Tenure: 3yrs
    • Compensation: CA$3.78m
  • Maeghan Albiston

    Assistant Vice President of Investor Relations

    • Tenure: 3.1yrs
  • Chad Rolstad (42yo)

    VP of Human Resources & Chief Culture Officer

    • Tenure: 0.7yrs
  • Ian Gray

    Vice President of Financial Planning & Accounting

    • Tenure: 1.8yrs

Board Members

  • Matthew Paull (68yo)

    Independent Director

    • Tenure: 3.8yrs
    • Compensation: CA$299.91k
  • Ed Monser (69yo)

    Independent Director

    • Tenure: 0.8yrs
    • Compensation: CA$11.61k
  • Isabelle Courville (56yo)

    Independent Chairman

    • Tenure: 0.4yrs
    • Compensation: CA$303.50k
  • Keith Creel (50yo)

    President

    • Tenure: 2.8yrs
    • Compensation: CA$12.49m
  • Gordon Trafton (65yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: CA$260.92k
  • Ubavka MacDonald (65yo)

    Independent Director

    • Tenure: 7.4yrs
    • Compensation: CA$303.28k
  • Jane Peverett (60yo)

    Independent Director

    • Tenure: 2.8yrs
    • Compensation: CA$303.28k
  • Jill Denham (58yo)

    Independent Director

    • Tenure: 3.1yrs
    • Compensation: CA$263.85k
  • John Baird (49yo)

    Independent Director

    • Tenure: 4.4yrs
    • Compensation: CA$263.85k
  • Andrea Robertson

    Director

    • Tenure: 0.3yrs

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$39.333b
  • Shares outstanding: 138.58m
  • 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 gr ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/20 23:33
End of Day Share Price2019/10/18 00:00
Earnings2019/06/30
Annual Earnings2018/12/31


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.