Financial Analysis: Canadian Pacific Kansas City (CP) versus Its Rivals

Canadian Pacific Kansas City (NYSE:CP) is one of 101 public companies in the “Ground Transportation” industry, but how does it contrast to its peers? We will compare Canadian Pacific Kansas City to similar businesses based on the strength of its valuation, dividends, institutional ownership, earnings, risk, profitability and analyst recommendations.

Volatility & Risk

Canadian Pacific Kansas City has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Canadian Pacific Kansas City’s peers have a beta of 1.03, suggesting that their average share price is 3% more volatile than the S&P 500.

Profitability

This table compares Canadian Pacific Kansas City and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Pacific Kansas City	24.14%	9.27%	4.96%
Canadian Pacific Kansas City Competitors	6.85%	12.56%	3.98%

Dividends

Canadian Pacific Kansas City pays an annual dividend of $0.77 per share and has a dividend yield of 0.8%. Canadian Pacific Kansas City pays out 24.7% of its earnings in the form of a dividend. As a group, “Ground Transportation” companies pay a dividend yield of 1.5% and pay out 26.9% of their earnings in the form of a dividend.

Insider and Institutional Ownership

72.2% of Canadian Pacific Kansas City shares are owned by institutional investors. Comparatively, 58.1% of shares of all “Ground Transportation” companies are owned by institutional investors. 0.0% of Canadian Pacific Kansas City shares are owned by company insiders. Comparatively, 14.8% of shares of all “Ground Transportation” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for Canadian Pacific Kansas City and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Pacific Kansas City	0	4	12	1	2.82
Canadian Pacific Kansas City Competitors	1382	6537	8701	267	2.47

Canadian Pacific Kansas City presently has a consensus price target of $112.58, suggesting a potential upside of 19.71%. As a group, “Ground Transportation” companies have a potential upside of 16.24%. Given Canadian Pacific Kansas City’s stronger consensus rating and higher probable upside, research analysts clearly believe Canadian Pacific Kansas City is more favorable than its peers.

Valuation and Earnings

This table compares Canadian Pacific Kansas City and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Canadian Pacific Kansas City	$10.79 billion	$2.96 billion	30.14
Canadian Pacific Kansas City Competitors	$8.63 billion	$896.49 million	31.19

Canadian Pacific Kansas City has higher revenue and earnings than its peers. Canadian Pacific Kansas City is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Summary

Canadian Pacific Kansas City beats its peers on 11 of the 15 factors compared.

Canadian Pacific Kansas City Company Profile

Canadian Pacific Kansas City Limited (NYSE: CP), known as CPKC, operates a transcontinental freight railway. Its network connects Canada, the United States and Mexico, providing rail transportation and related logistics services for businesses across North America. CPKC carries a range of goods, including grain and other agricultural products, intermodal freight, automotive shipments, energy products, chemicals, forest products and industrial materials. Its services include rail freight transportation, intermodal shipping and logistics solutions.