Heartland Express (NASDAQ: HTLD) and Knight Transportation (NYSE:KNX) are both transportation companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, analyst recommendations, valuation and risk.

Valuation and Earnings

This table compares Heartland Express and Knight Transportation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Heartland Express $548.88 million 3.17 $165.30 million $0.66 31.64
Knight Transportation $1.11 billion 2.70 $243.34 million $0.96 38.75

Knight Transportation has higher revenue and earnings than Heartland Express. Heartland Express is trading at a lower price-to-earnings ratio than Knight Transportation, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Heartland Express has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500. Comparatively, Knight Transportation has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Heartland Express and Knight Transportation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heartland Express 2 10 1 0 1.92
Knight Transportation 1 4 8 0 2.54

Heartland Express presently has a consensus target price of $15.11, indicating a potential downside of 27.63%. Knight Transportation has a consensus target price of $37.62, indicating a potential upside of 1.12%. Given Knight Transportation’s stronger consensus rating and higher possible upside, analysts clearly believe Knight Transportation is more favorable than Heartland Express.

Profitability

This table compares Heartland Express and Knight Transportation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heartland Express 9.89% 10.60% 7.28%
Knight Transportation 7.03% 10.39% 7.61%

Insider & Institutional Ownership

60.8% of Heartland Express shares are owned by institutional investors. Comparatively, 89.3% of Knight Transportation shares are owned by institutional investors. 42.1% of Heartland Express shares are owned by insiders. Comparatively, 9.9% of Knight Transportation shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Heartland Express pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Knight Transportation pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. Heartland Express pays out 12.1% of its earnings in the form of a dividend. Knight Transportation pays out 25.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Heartland Express has raised its dividend for 3 consecutive years.

Summary

Knight Transportation beats Heartland Express on 11 of the 17 factors compared between the two stocks.

Heartland Express Company Profile

Heartland Express, Inc. is a holding company. The Company is a short-to-medium haul truckload carrier. The Company focuses primarily on short- to medium-haul, asset-based dry van truckload services in regional markets near its terminals. The Company’s truckload services are primarily asset-based transportation services in the dry van truckload market, and it also offers truckload temperature-controlled transportation services and non-asset based brokerage services. All tractors are equipped with mobile communication systems. Its primary customers include retailers and manufacturers. It provides nationwide asset-based dry van truckload service for shippers from Washington to Florida and New England to California. The Company provides truckload services across the United States and parts of Canada. As of December 31, 2016, it had operated 20 terminal facilities throughout the contiguous United States in addition to its terminal and corporate headquarters in North Liberty, Iowa.

Knight Transportation Company Profile

Knight Transportation, Inc. is a provider of multiple truckload transportation and logistics services, which involve the movement of trailer or container loads of freight from origin to destination for a single customer. The Company operates through two segments: Trucking and Logistics. Its Trucking segment consists of three operating units: dry van truckload, temperature-controlled truckload and drayage services. The Trucking segment provides truckload transportation, including services of various products, goods and materials. Its Logistics segment consists of two operating units: freight brokerage services and rail intermodal. It provides logistics, freight management and other non-trucking services to its customers, through its Logistics segment. It provides a range of truckload and logistics services through its nationwide network of service centers, truckload tractor fleets and its contractual access to third-party capacity providers. It operates primarily in the United States.

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