XPO Logistics (NYSE: XPO) and Air Transport Services Group (NASDAQ:ATSG) are both transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitabiliy, dividends, institutional ownership and analyst recommendations.

Risk and Volatility

XPO Logistics has a beta of 2.32, suggesting that its share price is 132% more volatile than the S&P 500. Comparatively, Air Transport Services Group has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500.

Profitability

This table compares XPO Logistics and Air Transport Services Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XPO Logistics 0.76% 5.63% 1.41%
Air Transport Services Group 4.12% 11.68% 3.02%

Institutional and Insider Ownership

93.2% of XPO Logistics shares are owned by institutional investors. Comparatively, 87.3% of Air Transport Services Group shares are owned by institutional investors. 17.0% of XPO Logistics shares are owned by company insiders. Comparatively, 2.2% of Air Transport Services Group shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares XPO Logistics and Air Transport Services Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XPO Logistics $14.61 billion 0.49 $1.18 billion $0.84 76.00
Air Transport Services Group $829.40 million 1.68 $211.29 million $0.40 58.38

XPO Logistics has higher revenue and earnings than Air Transport Services Group. Air Transport Services Group is trading at a lower price-to-earnings ratio than XPO Logistics, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for XPO Logistics and Air Transport Services Group, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XPO Logistics 0 1 15 0 2.94
Air Transport Services Group 0 2 4 0 2.67

XPO Logistics currently has a consensus target price of $64.33, suggesting a potential upside of 0.77%. Air Transport Services Group has a consensus target price of $23.20, suggesting a potential downside of 0.64%. Given XPO Logistics’ stronger consensus rating and higher probable upside, equities research analysts plainly believe XPO Logistics is more favorable than Air Transport Services Group.

Summary

XPO Logistics beats Air Transport Services Group on 10 of the 14 factors compared between the two stocks.

About XPO Logistics

XPO Logistics, Inc. is a global provider of supply chain solutions. The Company operates in two segments: Transportation and Logistics. The Transportation segment provides freight brokerage, last mile, less-than-truckload (LTL), full truckload and global forwarding services. The Logistics segment provides a range of contract logistics services, including highly engineered and customized solutions, value-added warehousing and distribution, cold chain solutions and other inventory solutions. Its freight brokerage operations encompass truck brokerage globally, as well as intermodal, drayage and expedite services in North America. In Logistics segment, it provides warehousing and distribution solutions, such as factory support, aftermarket support, integrated manufacturing, packaging, labeling and transportation. As of December 31, 2016, the Company had more than 10,000 independent owner operators under contract to provide drayage, expedite, last mile and LTL services to its customers.

About Air Transport Services Group

Air Transport Services Group, Inc. (ATSG) is a holding company. The Company provides airline operations, aircraft leases, aircraft maintenance and other support services primarily to the cargo transportation and package delivery industries. It offers aircraft, crew, maintenance and insurance (ACMI) for specified cargo operations. Its segments include ACMI Services and CAM. Through its subsidiaries, it offers a range of complementary services to delivery companies, freight forwarders, airlines and government customers. Its leasing subsidiary, Cargo Aircraft Management, Inc. (CAM) leases cargo aircraft to its airlines, as well as to non-affiliated airlines and other lessees. Airborne Global Solutions, Inc. (AGS) is its subsidiary that assists the Company’s businesses in marketing plans and provides sales leads to its subsidiaries by identifying customers’ business and operational requirements. It owns two airlines, ABX Air, Inc. (ABX) and Air Transport International, Inc. (ATI).

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