Critical Analysis: Canadian Pacific Kansas City (NYSE:CP) versus Uber Technologies (NYSE:UBER)

Uber Technologies (NYSE:UBER) and Canadian Pacific Kansas City (NYSE:CP) are both large-cap industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Risk & Volatility

Uber Technologies has a beta of 1.27, meaning that its stock price is 27% more volatile than the S&P 500. Comparatively, Canadian Pacific Kansas City has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500.

Insider & Institutional Ownership

80.2% of Uber Technologies shares are held by institutional investors. Comparatively, 72.2% of Canadian Pacific Kansas City shares are held by institutional investors. 3.8% of Uber Technologies shares are held by insiders. Comparatively, 0.0% of Canadian Pacific Kansas City shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Uber Technologies and Canadian Pacific Kansas City”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Uber Technologies	$55.23 billion	2.41	$10.05 billion	$4.55	14.32
Canadian Pacific Kansas City	$16.01 billion	4.91	$2.96 billion	$3.12	28.76

Uber Technologies has higher revenue and earnings than Canadian Pacific Kansas City. Uber Technologies is trading at a lower price-to-earnings ratio than Canadian Pacific Kansas City, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Uber Technologies and Canadian Pacific Kansas City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Uber Technologies	17.34%	43.36%	19.15%
Canadian Pacific Kansas City	24.14%	9.22%	4.97%

Analyst Recommendations

This is a summary of current recommendations for Uber Technologies and Canadian Pacific Kansas City, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Uber Technologies	3	4	33	2	2.81
Canadian Pacific Kansas City	0	4	12	1	2.82

Uber Technologies presently has a consensus price target of $102.97, indicating a potential upside of 58.03%. Canadian Pacific Kansas City has a consensus price target of $112.00, indicating a potential upside of 24.82%. Given Uber Technologies’ higher possible upside, analysts clearly believe Uber Technologies is more favorable than Canadian Pacific Kansas City.

Summary

Uber Technologies beats Canadian Pacific Kansas City on 11 of the 15 factors compared between the two stocks.

About Uber Technologies

Uber Technologies, Inc. develops and operates proprietary technology applications in the United States, Canada, Latin America, Europe, the Middle East, Africa, and Asia excluding China and Southeast Asia. It operates through three segments: Mobility, Delivery, and Freight. The Mobility segment connects consumers with a range of transportation modalities, such as ridesharing, carsharing, micromobility, rentals, public transit, taxis, and other modalities; and offers riders in a variety of vehicle types, as well as financial partnerships products and advertising services. The Delivery segment allows to search for and discover restaurants to grocery, alcohol, convenience, and other retails; order a meal or other items; and Uber direct, a white-label Delivery-as-a-Service for retailers and restaurants, as well as advertising. The Freight segment manages transportation and logistics network, which connects shippers and carriers in digital marketplace including carriers upfronts, pricing, and shipment booking; and provides on-demand platform to automate logistics end-to-end transactions for small-and medium-sized business to global enterprises. The company was formerly known as Ubercab, Inc. and changed its name to Uber Technologies, Inc. in February 2011. Uber Technologies, Inc. was founded in 2009 and is headquartered in San Francisco, California.

About Canadian Pacific Kansas City

Canadian Pacific Kansas City Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada, the United States, and Mexico. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; merchandise freight, such as forest products, energy, chemicals and plastics, metals, minerals, consumer products, and automotive; and intermodal traffic comprising retail goods in overseas containers. It also provides rail and intermodal transportation services over a network of approximately 20,000 miles serving business centres. The company was formerly known as Canadian Pacific Railway Limited and changed its name to Canadian Pacific Kansas City Limited in April 2023. Canadian Pacific Kansas City Limited was incorporated in 1881 and is headquartered in Calgary, Canada.