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
Interest Expense120.0124.0
Interest Coverage5.174.86

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


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.

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.

1 2 3 4 5
premium   discount
  Price to
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.

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.

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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