My Transportation Stocks

I cover 3 transportation stocks of Canadian National Railway (TSX-CNR, NYSE-CNI), Canadian Pacific Railway (TSX-CP, NYSE-CP) and TFI International (TSX-TFII, OTC-TFIFF). I wanted to check and see if any of my transportation stocks are selling at a reasonable price. Unfortunately, on a lot of my tests on all three stocks show these stocks are relatively expensive.

The historical and 10 year median values would be good for one year in testing of stock prices for these stocks. For up to a year, you can calculate say the current yield, or get it from a web site and see if it passes the dividend yield tests. Say CNR price moves to $131.20 and gets a yield of 1.88% then it would not only pass the dividend yield historical test by being 17% below the historical median dividend yield of 1.60%, but the yield would also be 1% below the 10 year median yield of $1.86%.

For dividend paying growth stocks, the dividend yields are important way to judge current stock prices. In the following chart I show the 10 year, historical average and historical median dividend yields for these stocks.

Transportation 2021	Symbol	10 Year	Hist. Ave	Hist. Med
Canadian Pacific	CP	0.99%	2.25%	1.53%
Canadian National	CNR	1.86%	1.68%	1.60%
TFI International	TFII	2.43%	9.89%	3.13%

In this next chart, I compare the current dividend yield to the historical median dividend yield. What you want is a current yield higher than the historical dividend yield and that would show that the stock prices are relatively reasonable to cheap. In the next chart only CNR has a higher current dividend yield and shows a reasonable price. A stock price is considered expensive if the current yield is more than 20% below the historical yield which is true for CP and TFI.

Transportation 2021	Symbol	Price	Dividend	Yield	M/C
Canadian Pacific	CP	$471.64	$3.80	0.81%	-47.34%
Canadian National	CNR	$145.13	$2.46	1.70%	5.94%
TFI International	TFII	$92.50	$1.16	1.25%	-59.93%

In the next chart, I compare the current dividend yield to the 10 year median dividend yield. What you want is a current yield higher than the 10 year median dividend yield. In the next chart no stock has a higher current dividend yield. A stock price is considered expensive if the current yield is more than 20% below the historical yield. A stock price is considered reasonable, but above the median if the current dividend yield is less than 20% below the 10 year median dividend yield. In this case CF and CNR are shown as reasonable, but above the median.

Transportation 2021	Symbol	Price	Dividend	Yield	M/C
Canadian Pacific	CP	$471.64	$3.80	0.81%	-18.62%
Canadian National	CNR	$145.13	$2.46	1.70%	-8.87%
TFI International	TFII	$92.50	$1.16	1.25%	-48.39%

In testing the stock price, I like to see the Dividend yield test results confirmed by the P/S Ratio test. In the chart below, I show the 10 year median P/S Ratio for these stocks.

Transportation 2021	Symbol	Ratio
Canadian Pacific	CP	4.62
Canadian National	CNR	5.23
TFI International	TFII	0.63

In this test, what I want is the current P/S Ratio to be below the 10 year median ratio for the stock. The stock is considered to still be reasonable, but above the median if the current P/S Ratio is less than 20% above the 10 year median P/S Ratio. In this test, all these stocks are showing as relatively expensive. CNR is showing as the least relatively expensive stock.

Transportation 2021	Symbol	Price	Rev per Sh	P/S Ratio	M/C
Canadian Pacific	CP	$471.64	$62.70	7.52	62.82%
Canadian National	CNR	$145.13	$20.71	7.01	33.99%
TFI International	TFII	$92.50	$83.53	1.11	75.78%

In the following chart, I am showing the 10 year low, median, and high median Price/Graham Price ratios.

Transportation 2021	Symbol	Low	Median	High
Canadian Pacific	CP	1.69	2.03	2.39
Canadian National	CNR	1.52	1.81	2.03
TFI International	TFII	0.84	1.05	1.39

In this test, for a reasonable price, I would like to see the current P/GP Ratio below the 10 year median ratios above. None meet this. A stock is cheap if the current P/GP Ratio is below the low P/GP median ratio. None meet this. A stock is expensive if the current P/GP Ratio is above the high median 10 year ratio. In this test, all the stocks are expensive. For example, CP is expensive because the current P/GP Ratio of 2.98 is above the 10 year high median P/GP Ratio of 2.39.

Transportation 2021	Symbol	Price	Graham Pr	P/GP Ratio	M/C
Canadian Pacific	CP	$471.64	$158.36	2.98	46.71%
Canadian National	CNR	$145.13	$60.70	2.39	32.10%
TFI International	TFII	$92.50	$50.28	1.84	75.21%

The next test is the Price/Earnings per Share Ratio test. The chart below shows the 10 year low, median, and high median P/E Ratios for each of my Transportation stocks.

Transportation 2021	Symbol	Low P/E	Median P/E	High P/E
Canadian Pacific	CP	15.29	19.09	22.89
Canadian National	CNR	14.90	17.56	19.98
TFI International	TFII	9.38	12.16	16.45

The next chart shows the current P/E Ratios for my Transportation stocks. A reasonable price is when the current P/E Ratio is below the 10 year high median P/E Ratio. Although it is best if the current P/E Ratio was at or below the 10 year median P/E Ratio. For CP the current P/E Ratio at 21.71 is below the 10 year high median P/E Ratio. Its price is considered still reasonable but above the median.

The other two stocks are expensive as their current P/E Ratios are above the 10 year high median P/E Ratios of the above chart. For example, the TFII current P/E Ratio at 19.89 is above the above 10 year high median Ratio of 16.45.

Transportation 2021	Symbol	Price	2021 EPS Est.	Curr P/E	M/C
Canadian Pacific	CP	$471.64	$20.30	23.23	21.71%
Canadian National	CNR	$145.13	$5.92	24.52	39.61%
TFI International	TFII	$92.50	$4.65	19.89	63.59%

The last test is to compare the 10 year median P/B Ratio in the chart below to the current P/B Ratio of each stock. Ideally the best result is for the current P/B Ratio to be at or below the 10 year median P/E Ratios.

Transportation 2021	Symbol	P/B
Canadian Pacific	CP	5.44
Canadian National	CNR	4.24
TFI International	TFII	2.12

None of the stock have a current P/B Ratio below the 10 year median P/B Ratios. Also, none have a current P/B Ratio is less than 20% above the 10 year median Ratio which would mean the current stock price is considered to be still reasonable but above the median. They are all considered to be relatively expensive as all the current ratios are more than 20% higher than the 10 year median P/B Ratios. For example, for CP the current P/B Ratio of 8.59 is 58% above the 10 year median P/B Ratio of 5.44.

Transportation 2021	Symbol	Price	BVPS	Current P/B	M/C
Canadian Pacific	CP	$471.64	$54.91	8.59	57.89%
Canadian National	CNR	$145.13	$27.67	5.25	23.70%
TFI International	TFII	$92.50	$24.16	3.83	80.60%

On my other blog I wrote yesterday about Bombardier Inc (TSX-BBD.B, OTC-BDRBF) ... learn more. Next, I will write about Home Capital Group (TSX-HCG, OTC-HMCBF) ... learn more on Friday, March 12, 2021 around 5 pm.

This blog is meant for educational purposes only and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. I do research for my own edification and I am willing to share. I write what I think and I may or may not be correct.

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