Railroads, Line-Haul Operating
Canadian Pacific Kansas City Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; and merchandise freight, such as energy, chemicals and plastics, metals, minerals and consumer, automotive, and forest products. It transports intermodal traffic comprising retail goods in overseas containers. The company offers rail and intermodal transportation services through a network of approximately 13,000 miles serving business centers in Quebec and British Columbia, Canada; and the United States Northeast and Midwest regions. Canadian Pacific Kansas City Limited is headquartered in Calgary, Canada.
Discounted Cash Flow Valuation of Canadian Pacific Kansas City Ltd
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
The average Net Margin over the past 5 years is +33.66%.
The trend of Net Margin over the past 5 years is +1.24%.
The average ROA over the past 5 years is +11.69%.
The trend of ROA over the past 5 years is -2.14%.
The average ROE over the past 5 years is +25.36%.
The trend of ROE over the past 5 years is -5.87%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
The Debt/FCF trailing twelve month is 10.63.
The trend of Debt/FCF over the past 5 years is -0.08.
Graham’s Stability measure stands at 1.00.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
The Revenue CAGR over the past 5 years is +6.1%.
The trend of Revenue growth rate over the past 5 years is +0.49%.
The Earnings CAGR over the past 5 years is +7.9%.
The trend of Earnings growth rate over the past 5 years is -2.8%.
The Equity CAGR over the past 5 years is +43.29%.
The trend of Equity growth rate over the past 5 years is +20.92%.
The FCF CAGR over the past 5 years is +25.15%.
The trend of FCF growth rate over the past 5 years is +4.24%.