Canadian Pacific Kansas City Limited (CP) vs Norfolk Southern Corporation (NSC)

Canadian Pacific Kansas City Limited and Norfolk Southern Corporation are both Railroads companies. Canadian Pacific Kansas City Limited and Norfolk Southern Corporation are of similar size ($76.8B and $70.3B). Norfolk Southern Corporation trades at the lower P/E: 26.7× against 27.9×. Canadian Pacific Kansas City Limited grew revenue faster over the last twelve months: 4.57% against 2.97%. Canadian Pacific Kansas City Limited has the higher net margin (25.0% vs 21.0%) and the lower return on invested capital (4.91% vs 7.93%). Both pay a dividend; Norfolk Southern Corporation yields more (2.19% vs 0.68%). Across the 23 metrics below, Norfolk Southern Corporation leads on 13 and Canadian Pacific Kansas City Limited on 10.

Valuation

Metric CP NSC Railroads median
P/E 27.87 26.73 26.88
P/S 6.89 5.61 2.58
P/B 2.24 4.33 4.33
Price to free cash flow 43.80 36.91 26.65
EV/EBITDA 17.04 15.77 13.50
EV/Sales 8.50 6.85 4.56
Earnings yield 3.59% 3.74% 3.59%
Free cash flow yield 2.28% 2.71% 3.41%

Profitability

Metric CP NSC Railroads median
Gross margin 69.79% 68.79% 30.61%
Operating margin 36.73% 32.19% 24.29%
Net margin 24.99% 21.00% 10.59%
Free cash flow margin 15.74% 15.20% 8.43%
Return on equity 8.16% 16.97% 11.49%
Return on assets 4.43% 5.90% 3.98%
Return on invested capital 4.91% 7.93% 7.59%

Growth

Metric CP NSC Railroads median
Revenue growth (TTM) 4.57% 2.97% 2.97%
EPS growth (last fiscal year) 11.38% 10.20% —
Revenue growth, 5-year CAGR 13.40% 4.47% 5.27%
Net income growth, 5-year CAGR 10.19% 7.38% 0.88%

Health

Metric CP NSC Railroads median
Debt to equity 0.53 1.02 0.58
Current ratio 0.59 0.83 1.03
Net debt to EBITDA 3.02 2.71 2.71

Dividend

Metric CP NSC Railroads median
Dividend yield 0.68% 2.19% 2.17%
Payout ratio — 0.47 0.19

Size

Metric CP NSC Railroads median
Market cap 76.76b 70.34b 2.22b

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