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Canadian Pacific Kansas City Ltd CP

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Canadian Pacific's Intermodal Volumes Face Tough Comps, but Carload Trends Improving

Matthew Young

Following the appointment of railroading legend Hunter Harrison as CEO in 2012, Canadian Pacific embarked on a successful profitability turnaround. Harrison and his successor—operations expert Keith Creel, who worked alongside Harrison for decades—took the rail from ranking as one of the worst Class I margin performers to among the best. We like that Creel has infused the firm's culture with precision-scheduled railroading principles, which stand behind much of the rail's progress. Profitability caught up with PSR pioneer and historical margin leader Canadian National in 2018 and surpassed it in 2019 with a 60% operating ratio.

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Price vs Fair Value

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CP is trading at a LOCK|mLr&nXf premium.
Price
CA$120.24
Fair Value
LOCK|M!
Uncertainty
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1-Star Price
LOCK|$.qc
5-Star Price
LOCK|.L&
Economic Moat
LOCK|Xdc
Capital Allocation
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Bulls Say, Bears Say

Bulls

The Kansas City Southern merger, which creates new, seamless intermodal lanes, is yielding meaningful opportunities for incremental volume growth.

Bears

US tariffs will temper carload demand for several commodity shipments like steel and aluminum this year.

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News

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Trading Information

Previous Close Price
—
Day Range
—–—
52-Week Range
—–—
Bid/Ask
— / —
Shares Outstanding
879.08M
Market Cap
—
Volume/Avg
— / —

Key Statistics

Price/Earnings (Normalized)
25.37
Price/Sales
6.99
Dividend Yield (Trailing)
0.83%
Dividend Yield (Forward)
0.89%
Dividend Payment Schedule
Jan, Apr, Jul, Oct
Total Yield
4.68%

Company Profile

Canadian Pacific Kansas City is a Class I railroad operating on tracks that span most of Canada and into parts of the Midwestern and Northeastern United States. Following the April 2023 Kansas City Southern merger, CPKC operates new single-linehaul services from Canada and the Upper Midwest down through Texas, the Gulf of Mexico, and into Mexico. It also hauls cross-border and intra-Mexico freight via operating concessions on more than 3,000 miles of rail in Mexico. CPKC hauls shipments of grain, intermodal containers, energy products (like crude and frac sand), chemicals, plastics, coal, fertilizer and potash, automotive products, and a diverse mix of other merchandise.
Sector
Industrials
Industry
Railroads
Stock Style Box
Large Core
Total Number of Employees
19,687
Website
https://www.cpkcr.com

Competitors

Valuation

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Metric
CP
CSX
UNP
Price/Earnings (Normalized)
 25.3725.3222.18
Price/Book Value
 2.276.127.83
Price/Sales
 6.995.976.36
Price/Cash Flow
 18.9416.5815.92
Price/Earnings
CP
CSX
UNP

Financial Strength

Metric
CP
CSX
UNP
Quick Ratio
 0.450.690.76
Current Ratio
 0.590.820.99
Interest Coverage
 6.645.918.36
Quick Ratio
CP
CSX
UNP

Profitability

Metric
CP
CSX
UNP
Return on Assets (Normalized)
 4.89%7.74%10.49%
Return on Equity (Normalized)
 9.20%25.68%39.59%
Return on Invested Capital (Normalized)
 6.95%12.25%16.19%
Return on Assets
CP
CSX
UNP

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1-Day Chart
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Morningstar Rating for Stocks
Capital Allocation
Economic Moat
Market Cap
Union Pacific Corp
UNP
LOCK|@<Tr^@dLOCK|m<K$162B
 CSX Corp
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LOCK|QF#>>qnLOCK|%&$86B
 Canadian Pacific Kansas City Ltd
CP
LOCK|lSB&JzsLOCK|Hc$74B
 Canadian National Railway Co
CNI
LOCK|zpXrXLcLOCK|Zf$71B
 Norfolk Southern Corp
NSC
LOCK|xlx?!k@LOCK|nf$70B
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WAB
—LOCK|tWh$49B
 MTR Corp Ltd ADR
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—LOCK|KZb@$26B
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—LOCK|h$y$&$26B
 East Japan Railway Co
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—LOCK|%%JQF$24B
 East Japan Railway Co ADR
EJPRY
—LOCK|!<s$$24B

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