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Canadian National Railway Company (CNR $142.64)
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Constellation Software Inc. (CSU $2,359.50)
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Alimentation Couche-Tard Inc. (ATD $78.51)
Q: In response to a recent question on companies worth considering, 5i suggested ATD, CSU and CNR. I have 'some basic understanding' of ATD's and CNR's business, strengths, and financials. Just now taking an initial look at CSU, and wondering, how does a company with a P/E ratio (using 2025 EPS) of roughly 100, more debt than equity, and a negligible dividend rate so highly in today's uncertain environment?
5i Research Answer:
We show a trailing P/E of 19 and a forard P/E of 13. Free cash flow yield is 5.1%. Debt is roughly $4.8 bln while cash is $3.1 bln. The company also typically generates returns on equity well in excess of 20%. In terms of the uncertain environment, the acquisition approach does offer a stable pipeline through which they can acquire growth and weaker markets typically mean more opportunities start arising for a company like CSU to take advantage of.