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Canadian Pacific Railway Ltd
CP : NYSE : Services
$138.78 -1.60 | -1.20%
Today's Range: 138.25 - 142.48
Avg. Daily Volume: 1,113,300
09/02/15 - 1:42 PM ET

Financial Analysis


CANADIAN PACIFIC RAILWAY LTD's gross profit margin for the second quarter of its fiscal year 2015 has increased when compared to the same period a year ago. Even though sales decreased, the net income has increased, representing an increase to the bottom line. CANADIAN PACIFIC RAILWAY LTD has weak liquidity. Currently, the Quick Ratio is 0.61 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year, indicating deteriorating cash flow.

At the same time, stockholders' equity ("net worth") has significantly decreased by 26.41% from the same quarter last year. Overall, the key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the future.

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Income Statement Q2 FY15 Q2 FY14
Net Sales ($mil)1651.01681.0
EBITDA ($mil)791.0724.0
EBIT ($mil)646.0587.0
Net Income ($mil)390.0371.0


Balance Sheet Q2 FY15 Q2 FY14
Cash & Equiv. ($mil)185.0771.0
Total Assets ($mil)17390.017012.0
Total Debt ($mil)6701.04725.0
Equity ($mil)5251.07136.0


Profitability Q2 FY15 Q2 FY14
Gross Profit Margin47.9143.07
EBITDA Margin47.9143.06
Operating Margin39.1334.92
Sales Turnover0.390.37
Return on Assets8.976.06
Return on Equity29.7214.44
Debt Q2 FY15 Q2 FY14
Current Ratio0.851.42
Debt/Capital0.560.4
Interest Expense84.069.0
Interest Coverage7.698.51


Share Data Q2 FY15 Q2 FY14
Shares outstanding (mil)161.3172.8
Div / share0.280.33
EPS2.362.11
Book value / share32.5541.3
Institutional Own % n/a n/a
Avg Daily Volume1125735.0937520.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 16.09 for the Road & Rail industry and a discount compared to the S&P 500 average of 20.03. Conducting a second comparison, its price-to-book ratio of 4.42 indicates a significant premium versus the S&P 500 average of 2.67 and a premium versus the industry average of 3.35. The price-to-sales ratio is well above both the S&P 500 average and the industry average, indicating a premium.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CP 15.62 Peers 16.09   CP 9.97 Peers 8.88

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

CP is trading at a valuation on par with its peers.

 

Premium. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

CP is trading at a premium to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
CP 11.96 Peers 17.36   CP 0.72 Peers 1.40

Discount. A lower price-to-projected earnings ratio than its peers can signify a less expensive stock or lower future growth expectations.

CP is trading at a discount to its peers.

 

Discount. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

CP trades at a significant discount to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CP 4.42 Peers 3.35   CP 57.33 Peers 15.94

Premium. A higher price-to-book ratio makes a stock less attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

CP is trading at a significant premium to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

CP is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CP 3.44 Peers 2.66   CP 6.55 Peers 4.67

Premium. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

CP is trading at a significant premium to its industry.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

CP has a sales growth rate that significantly exceeds its peers.

 

 

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