Canadian Pacific Railway Ltd

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CP : NYSE : Services
$145.03 up 1.30 | 0.90%
Today's Range: 143.60 - 145.51
Avg. Daily Volume: 774,800
10/27/16 - 4:01 PM ET

Financial Analysis

CANADIAN PACIFIC RAILWAY LTD's gross profit margin for the third quarter of its fiscal year 2016 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 very weak liquidity. Currently, the Quick Ratio is 0.43 which clearly shows a lack of ability to cover short-term cash needs. The liquidity decreased from the same period a year ago, despite already having weak liquidity to begin with. This would indicate deteriorating cash flow.

During the same period, stockholders' equity ("net worth") has increased by 16.95% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q3 FY16 Q3 FY15
Net Sales ($mil)1554.01709.0
EBITDA ($mil)812.0834.0
EBIT ($mil)657.0685.0
Net Income ($mil)347.0323.0

Balance Sheet Q3 FY16 Q3 FY15
Cash & Equiv. ($mil)103.0661.0
Total Assets ($mil)19421.018431.0
Total Debt ($mil)8879.08677.0
Equity ($mil)4669.03992.0

Profitability Q3 FY16 Q3 FY15
Gross Profit Margin52.2548.8
EBITDA Margin52.2548.8
Operating Margin42.2840.08
Sales Turnover0.320.37
Return on Assets7.898.05
Return on Equity32.8537.17
Debt Q3 FY16 Q3 FY15
Current Ratio0.591.06
Interest Expense116.0103.0
Interest Coverage5.666.65

Share Data Q3 FY16 Q3 FY15
Shares outstanding (mil)146.3153.8
Div / share0.380.26
Book value / share31.9125.96
Institutional Own % n/a n/a
Avg Daily Volume768217.01065302.0


BUY. This stock's P/E ratio indicates a discount compared to an average of 17.19 for the Road & Rail industry and a significant discount compared to the S&P 500 average of 24.64. Conducting a second comparison, its price-to-book ratio of 4.58 indicates a significant premium versus the S&P 500 average of 2.73 and a premium versus the industry average of 3.38. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium.

1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
CP 14.49 Peers 17.19   CP 11.09 Peers 9.53

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.


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.

1 2 3 4 5
premium   discount
  Price to
1 2 3 4 5
premium   discount
CP 12.02 Peers 20.01   CP 0.58 Peers 4.32

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.


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.

1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
CP 4.58 Peers 3.38   CP 12.62 Peers -2.26

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.

1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
CP 3.40 Peers 3.16   CP -7.42 Peers -6.72

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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