Is CP a high-quality business?

AlphaMadera's AlphaQuality grade scores Canadian Pacific Kansas City Ltd. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how CP compares to a Buffett-style quality bar.

What is Canadian Pacific Kansas City Ltd.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to CP based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes CP a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

CP - Canadian Pacific Kansas City Ltd.

Price: -- -- | CONSENSUS: Buy DETAILS | PRICE TARGET: $92.00 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Stable Earnings Power

AlphaQuality — archetype-weighted quantitative grade

C+ 57.8 / 100 composite

Composite Grade

Composite of six pillars weighted for stable earnings power businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 20%

D- 28.8

5yr Avg ROIC 4.0% 30/100
Operating Margin Trend -0.80 pp/yr 25/100

Capital Efficiency

Weight: 15%

D- 32.2

5yr Avg ROE 7.9% 50/100
5yr Share-Count CAGR 7.7% 0/100

Growth Quality

Weight: 15%

B 74.1

5yr Revenue CAGR 17.2% 95/100
5yr EPS CAGR 1.9% 33/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 15%

B+ 75.2

5yr FCF Margin 20.1% 90/100
5yr FCF/NI Conversion 0.62x 57/100

Balance Sheet

Weight: 20%

B- 67.2

Net Debt / EBITDA 2.75x 55/100
Interest Coverage (EBIT/Int) 7.26x 74/100
Altman Z-Score 3.06 81/100

Stability

Weight: 15%

B+ 76.1

EPS Volatility (σ/μ) 0.26 62/100
Piotroski F-Score 7 78/100
Negative-Revenue Years (5) 0/5 100/100

1 of 3 gurus held; 1 added; 3 full exits.

Holders: 1 -2
Avg Δ position: —
New buys: 0
Full exits: 3

Cooperman sold -100%
Dalio sold -100%
Wood sold -100%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (20%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (15%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (15%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (20%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (15%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.