Canadian Pacific Railway Limited (NYSE: CP) and Ryder System (NYSE:R) are both mid-cap transportation companies, but which is the superior business? We will compare the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, earnings, institutional ownership and profitability.

Risk & Volatility

Canadian Pacific Railway Limited has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Ryder System has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500.

Valuation and Earnings

This table compares Canadian Pacific Railway Limited and Ryder System’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Canadian Pacific Railway Limited $5.08 billion 4.61 $2.61 billion $8.40 19.07
Ryder System $6.99 billion 0.60 $1.82 billion $4.17 18.97

Canadian Pacific Railway Limited has higher revenue, but lower earnings than Ryder System. Ryder System is trading at a lower price-to-earnings ratio than Canadian Pacific Railway Limited, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Canadian Pacific Railway Limited and Ryder System’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canadian Pacific Railway Limited 25.49% 33.06% 8.38%
Ryder System 3.17% 11.71% 2.21%

Dividends

Canadian Pacific Railway Limited pays an annual dividend of $1.67 per share and has a dividend yield of 1.0%. Ryder System pays an annual dividend of $1.84 per share and has a dividend yield of 2.3%. Canadian Pacific Railway Limited pays out 19.9% of its earnings in the form of a dividend. Ryder System pays out 44.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Canadian Pacific Railway Limited has raised its dividend for 8 consecutive years.

Institutional and Insider Ownership

65.9% of Canadian Pacific Railway Limited shares are owned by institutional investors. Comparatively, 89.5% of Ryder System shares are owned by institutional investors. 0.0% of Canadian Pacific Railway Limited shares are owned by insiders. Comparatively, 2.0% of Ryder System shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for Canadian Pacific Railway Limited and Ryder System, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canadian Pacific Railway Limited 0 3 19 0 2.86
Ryder System 0 5 2 0 2.29

Canadian Pacific Railway Limited currently has a consensus price target of $187.72, indicating a potential upside of 17.17%. Ryder System has a consensus price target of $75.25, indicating a potential downside of 4.87%. Given Canadian Pacific Railway Limited’s stronger consensus rating and higher probable upside, analysts clearly believe Canadian Pacific Railway Limited is more favorable than Ryder System.

Summary

Canadian Pacific Railway Limited beats Ryder System on 12 of the 17 factors compared between the two stocks.

Canadian Pacific Railway Limited Company Profile

Canadian Pacific Railway Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States. The Company operates through rail transportation segment. The Company’s transports bulk commodities, merchandise freight, and intermodal traffic over a network of approximately 12,400 miles. Its railway feeds directly into the United States heartland from the east and west coasts. Its Bulk commodities include grain, coal, potash, fertilizers and sulfur. Its Merchandise freight consists of finished vehicles and machinery, as well as forest and industrial and consumer products. Its Intermodal traffic consists of retail goods in overseas containers that can be transported by train, ship and truck and in domestic containers and trailers that can be moved by train and truck. Its subsidiaries include Canadian Pacific Railway Company, Soo Line Railroad Company, Delaware and Hudson Railway Company, Inc. and Mount Stephen Properties Inc.

Ryder System Company Profile

Ryder System, Inc. is engaged in offering transportation and supply chain management solutions. The Company operates through three segments: Fleet Management Solutions (FMS), which provides leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the United States, Canada and the United Kingdom; Dedicated Transportation Solutions (DTS), which provides vehicles and drivers as part of a dedicated transportation solution in the United States, and Supply Chain Solutions (SCS), which provides supply chain solutions, including distribution and transportation services in North America and Asia. Through its FMS business, the Company provides its customers with various fleet solutions. In addition, it provides its customers to purchase a selection of used trucks, tractors and trailers through its used vehicle sales program. Its customer base includes enterprises operating in various industries.

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