Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.
NEW YORK (
) has been reiterated by TheStreet Ratings as a buy with a ratings score of B. The company's strengths can be seen in multiple areas, such as its revenue growth, increase in net income, good cash flow from operations, solid stock price performance and growth in earnings per share. We feel these strengths outweigh the fact that the company has had somewhat disappointing return on equity.
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Highlights from the ratings report include:
- CP's revenue growth has slightly outpaced the industry average of 2.0%. Since the same quarter one year prior, revenues slightly increased by 8.6%. Growth in the company's revenue appears to have helped boost the earnings per share.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Road & Rail industry. The net income increased by 52.8% when compared to the same quarter one year prior, rising from $142.00 million to $217.00 million.
- Net operating cash flow has increased to $267.00 million or 32.83% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of 7.18%.
- Powered by its strong earnings growth of 51.21% and other important driving factors, this stock has surged by 58.94% over the past year, outperforming the rise in the S&P 500 Index during the same period. We feel that the stock's sharp appreciation over the last year has driven it to a price level which is now somewhat expensive compared to the rest of its industry. The other strengths this company shows, however, justify the higher price levels.
- CANADIAN PACIFIC RAILWAY LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, CANADIAN PACIFIC RAILWAY LTD reported lower earnings of $2.80 versus $3.35 in the prior year.
Canadian Pacific Railway Limited, through its subsidiaries, operates as a transcontinental railway providing freight transportation services, logistics solutions, and supply chain expertise in Canada and the United States. Canadian Pacific Railway has a market cap of $21.5 billion and is part of the services sector and transportation industry. The company has a P/E ratio of 39.00, above the S&P 500 P/E ratio of 18.00. Shares are up 21.6% year to date as of the close of trading on Friday.
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--Written by a member of TheStreet Ratings Staff.
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