Canadian Pacific Return On Equity vs. Current Valuation
| CP Stock | CAD 107.11 0.81 0.76% |
Return On Equity | First Reported 2010-12-31 | Previous Quarter 0.09464475 | Current Value 0.14 | Quarterly Volatility 0.11101978 |
| Current Value | Last Year | Change From Last Year | 10 Year Trend | ||||||
|---|---|---|---|---|---|---|---|---|---|
| Gross Profit Margin | 0.59 | 0.5078 |
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| Net Profit Margin | 0.33 | 0.3128 |
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| Operating Profit Margin | 0.23 | 0.3495 |
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| Return On Assets | 0.047 | 0.0488 |
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| Return On Equity | 0.14 | 0.0946 |
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For Canadian Pacific profitability analysis, we use financial ratios and fundamental drivers that measure the ability of Canadian Pacific to generate income relative to revenue, assets, operating costs, and current equity. These fundamental indicators attest to how well Canadian Pacific Railway utilizes its assets to generate profit and value for its shareholders. The profitability module also shows relationships between Canadian Pacific's most relevant fundamental drivers. It provides multiple suggestions of what could affect the performance of Canadian Pacific Railway over time as well as its relative position and ranking within its peers.
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Canadian Pacific Railway Current Valuation vs. Return On Equity Fundamental Analysis
Comparative valuation techniques use various fundamental indicators to help in determining Canadian Pacific's current stock value. Our valuation model uses many indicators to compare Canadian Pacific value to that of its competitors to determine the firm's financial worth. Canadian Pacific Railway is number one stock in return on equity category among its peers. It also is the top company in current valuation category among its peers reporting about 1,500,884,676,279 of Current Valuation per Return On Equity. At this time, Canadian Pacific's Return On Equity is very stable compared to the past year. Comparative valuation analysis is a catch-all model that can be used if you cannot value Canadian Pacific by discounting back its dividends or cash flows. This model doesn't attempt to find an intrinsic value for Canadian Pacific's Stock. Still, instead, it compares the stock's price multiples to a benchmark or nearest competition to determine if the stock is relatively undervalued or overvalued.Canadian Current Valuation vs. Return On Equity
Return on Equity or ROE tells company stockholders how effectually their money is being utilized or reinvested. It is a useful ratio when analyzing company profitability or the management effectiveness given the capital invested by the shareholders. ROE shows how efficiently a company utilizes investments to generate income.
Canadian Pacific |
| = | 0.0809 |
For most industries, Return on Equity between 10% and 30% are considered desirable to provide dividends to owners and have funds for the future growth of the company. Investors should be very careful using ROE as the only efficiency indicator because ROE can be high if a company is heavily leveraged.
Enterprise Value is a firm valuation proxy that approximates the current market value of a company. It is typically used to determine the takeover or merger price of a firm. Unlike Market Cap, this measure takes into account the entire liquid asset, outstanding debt, and exotic equity instruments that the company has on its balance sheet. When a takeover occurs, the parent company will have to assume the target company's liabilities but will take possession of all cash and cash equivalents.
Canadian Pacific |
| = | 121.42 B |
Enterprise Value can be a useful tool to compare companies with different capital structures. Long term liability and current cash or cash equivalents can have a huge impact on market valuation of a given company.
Canadian Current Valuation vs Competition
Canadian Pacific Railway is the top company in current valuation category among its peers. After adjusting for long-term liabilities, total market size of Industrials industry is currently estimated at about 594.22 Billion. Canadian Pacific totals roughly 121.42 Billion in current valuation claiming about 20% of equities under Industrials industry.
Canadian Pacific Profitability Projections
The most important aspect of a successful company is its ability to generate a profit. For investors in Canadian Pacific, profitability is also one of the essential criteria for including it into their portfolios because, without profit, Canadian Pacific will eventually generate negative long term returns. The profitability progress is the general direction of Canadian Pacific's change in net profit over the period of time. It can combine multiple indicators of Canadian Pacific, where stable trends show no significant progress. An accelerating trend is seen as positive, while a decreasing one is unfavorable. A rising trend means that profits are rising, and operational efficiency may be rising as well. A decreasing trend is a sign of poor performance and may indicate upcoming losses.
| Last Reported | Projected for Next Year | ||
| Accumulated Other Comprehensive Income | -618 M | -648.9 M | |
| Operating Income | 4.4 B | 4.6 B | |
| Income Before Tax | -3.1 B | -2.9 B | |
| Total Other Income Expense Net | -7.4 B | -7.1 B | |
| Net Income | 3.9 B | 4.1 B | |
| Income Tax Expense | -7 B | -6.6 B | |
| Net Income From Continuing Ops | 3.9 B | 2.6 B | |
| Net Income Applicable To Common Shares | 4 B | 2.4 B | |
| Interest Income | 379.8 M | 382.9 M | |
| Net Interest Income | -771 M | -809.5 M | |
| Change To Netincome | -122.4 M | -128.5 M | |
| Net Income Per Share | 4.22 | 4.43 | |
| Income Quality | 1.05 | 1.94 | |
| Net Loss | (1.29) | (1.22) |
Canadian Profitability Driver Comparison
Profitability drivers are factors that can directly affect your investment outlook on Canadian Pacific. Investors often realize that things won't turn out the way they predict. There are maybe way too many unforeseen events and contingencies during the holding period of Canadian Pacific position where the market behavior may be hard to predict, tax policy changes, gold or oil price hikes, calamities change, and many others. The question is, are you prepared for these unexpected events? Although some of these situations are obviously beyond your control, you can still follow the important profit indicators to know where you should focus on when things like this occur. Below are some of the Canadian Pacific's important profitability drivers and their relationship over time.
Use Canadian Pacific in pair-trading
One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Canadian Pacific position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Canadian Pacific will appreciate offsetting losses from the drop in the long position's value.Canadian Pacific Pair Trading
Canadian Pacific Railway Pair Trading Analysis
The ability to find closely correlated positions to Canadian Pacific could be a great tool in your tax-loss harvesting strategies, allowing investors a quick way to find a similar-enough asset to replace Canadian Pacific when you sell it. If you don't do this, your portfolio allocation will be skewed against your target asset allocation. So, investors can't just sell and buy back Canadian Pacific - that would be a violation of the tax code under the "wash sale" rule, and this is why you need to find a similar enough asset and use the proceeds from selling Canadian Pacific Railway to buy it.
The correlation of Canadian Pacific is a statistical measure of how it moves in relation to other instruments. This measure is expressed in what is known as the correlation coefficient, which ranges between -1 and +1. A perfect positive correlation (i.e., a correlation coefficient of +1) implies that as Canadian Pacific moves, either up or down, the other security will move in the same direction. Alternatively, perfect negative correlation means that if Canadian Pacific Railway moves in either direction, the perfectly negatively correlated security will move in the opposite direction. If the correlation is 0, the equities are not correlated; they are entirely random. A correlation greater than 0.8 is generally described as strong, whereas a correlation less than 0.5 is generally considered weak.
Correlation analysis and pair trading evaluation for Canadian Pacific can also be used as hedging techniques within a particular sector or industry or even over random equities to generate a better risk-adjusted return on your portfolios.Use Investing Themes to Complement your Canadian Pacific position
In addition to having Canadian Pacific in your portfolios, you can quickly add positions using our predefined set of ideas and optimize them against your very unique investing style. A single investing idea is a collection of funds, stocks, ETFs, or cryptocurrencies that are programmatically selected from a pull of investment themes. After you determine your investment opportunity, you can then find an optimal portfolio that will maximize potential returns on the chosen idea or minimize its exposure to market volatility.Did You Try This Idea?
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To fully project Canadian Pacific's future profitability, investors should examine all historical financial statements. These statements provide investors with a comprehensive snapshot of the financial position of Canadian Pacific Railway at a specified time, usually calculated after every quarter, six months, or one year. Three primary documents fall into the category of financial statements. These documents include Canadian Pacific's income statement, its balance sheet, and the statement of cash flows.