Kansas City Southern (NYSE: KSU) and Con-way (NYSE:CNW) are both transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.

Dividends

Kansas City Southern pays an annual dividend of $1.32 per share and has a dividend yield of 1.3%. Con-way does not pay a dividend. Kansas City Southern pays out 26.5% of its earnings in the form of a dividend. Kansas City Southern has raised its dividend for 3 consecutive years and Con-way has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Kansas City Southern and Con-way’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kansas City Southern $2.47 billion 4.46 $1.18 billion $4.98 20.97
Con-way N/A N/A N/A N/A N/A

Kansas City Southern has higher revenue and earnings than Con-way.

Insider and Institutional Ownership

84.5% of Kansas City Southern shares are held by institutional investors. 1.0% of Kansas City Southern shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Kansas City Southern and Con-way’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kansas City Southern 21.52% 11.40% 5.68%
Con-way 3.09% 14.75% 5.26%

Analyst Recommendations

This is a breakdown of current ratings and price targets for Kansas City Southern and Con-way, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kansas City Southern 0 10 7 0 2.41
Con-way 0 0 0 0 N/A

Kansas City Southern currently has a consensus price target of $103.92, suggesting a potential downside of 0.49%. Given Kansas City Southern’s higher possible upside, research analysts plainly believe Kansas City Southern is more favorable than Con-way.

Summary

Kansas City Southern beats Con-way on 8 of the 10 factors compared between the two stocks.

About Kansas City Southern

Kansas City Southern (KCS) is a holding company. The Company has domestic and international rail operations in North America that are focused on the north/south freight corridor connecting commercial and industrial markets in the central United States with industrial cities in Mexico. The Company’s subsidiaries include The Kansas City Southern Railway Company (KCSR) and Kansas City Southern de Mexico, S.A. de C.V. (KCSM). KCSR serves a 10-state region in the midwest and southeast regions of the United States and has the north/south rail route between Kansas City, Missouri and various ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi and Texas. KCSM operates a corridor of the Mexican railroad system. KCSM’s rail lines provide rail access to the United States and Mexico border crossing at Nuevo Laredo, Tamaulipas. KCSM also provides rail access to the Port of Lazaro Cardenas on the Pacific Ocean.

About Con-way

Con-way Inc. (Con-way) provides transportation, logistics and supply-chain management services for a range of manufacturing, industrial and retail customers. The Company’s business units operate in regional, inter-regional and transcontinental less-than-truckload and full-truckload freight transportation, multimodal freight brokerage and trailer manufacturing. The Company operates in three segments: Freight, Logistics and Truckload. The Freight segment consists of the operating results of the Con-way Freight business unit. Con-way Freight is a less-than-truckload motor carrier that utilizes a network of freight service centers to provide day-definite regional, inter-regional and transcontinental less-than-truckload freight services. The Logistics segment consists of the operating results of the Menlo Logistics (Menlo) business unit, which develops contract-logistics solutions. The Truckload segment consists of the operating results of the Con-way Truckload business unit.

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