Canadian Pacific Railway Ltd

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CP : NYSE : Services
$158.85 | %
Today's Range: 158.56 - 160.28
Avg. Daily Volume: 671300.0
05/26/17 - 4:01 PM ET

Financial Analysis


CANADIAN PACIFIC RAILWAY LTD's gross profit margin for the first quarter of its fiscal year 2017 is essentially unchanged when compared to the same period a year ago. Even though sales increased, the net income has decreased. CANADIAN PACIFIC RAILWAY LTD has weak liquidity. Currently, the Quick Ratio is 0.71 which shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has remained virtually unchanged only decreasing by 4.76% 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 Q1 FY17 Q1 FY16
Net Sales ($mil)1603.01591.0
EBITDA ($mil)786.0765.0
EBIT ($mil)620.0603.0
Net Income ($mil)431.0540.0


Balance Sheet Q1 FY17 Q1 FY16
Cash & Equiv. ($mil)201.0571.0
Total Assets ($mil)19397.019349.0
Total Debt ($mil)8614.08453.0
Equity ($mil)5038.05290.0


Profitability Q1 FY17 Q1 FY16
Gross Profit Margin49.0348.08
EBITDA Margin49.0348.08
Operating Margin38.6837.9
Sales Turnover0.320.34
Return on Assets7.688.12
Return on Equity29.5729.71
Debt Q1 FY17 Q1 FY16
Current Ratio0.941.24
Debt/Capital0.630.62
Interest Expense120.0124.0
Interest Coverage5.174.86


Share Data Q1 FY17 Q1 FY16
Shares outstanding (mil)146.7153.0
Div / share0.380.27
EPS2.933.51
Book value / share34.3434.58
Institutional Own % n/a n/a
Avg Daily Volume674765.0856599.0

Valuation


BUY. This stock's P/E ratio indicates a discount compared to an average of 20.58 for the Road & Rail industry and a discount compared to the S&P 500 average of 25.19. Conducting a second comparison, its price-to-book ratio of 4.53 indicates a significant premium versus the S&P 500 average of 3.02 and a premium versus the industry average of 3.89. The current price-to-sales ratio is well above the S&P 500 average, but below the industry average. The valuation analysis reveals that, CANADIAN PACIFIC RAILWAY LTD seems to be trading at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CP 15.52 Peers 20.58   CP 10.40 Peers 11.71

Discount. A lower P/E ratio than its peers can signify a less expensive stock or lower growth expectations.

CP is trading at a discount to its peers.

 

Discount. 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 discount 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 12.03 Peers 21.37   CP 1.96 Peers 1.87

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 significant discount to its peers.

 

Average. 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 valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CP 4.53 Peers 3.89   CP 0.40 Peers 1.04

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 premium to its peers.

 

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

However, CP is expected to significantly trail its peers on the basis of its earnings growth rate.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CP 3.66 Peers 3.69   CP -5.94 Peers -2.00

Average. 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 valuation on par with its industry on this measurement.

 

Lower. A sales growth rate that trails the industry implies that a company is losing market share.

CP significantly trails its peers on the basis of sales growth

 

 

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