Covenant Transportation Group (NASDAQ: CVTI) and Genesee & Wyoming (NYSE:GWR) are both transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, profitability, institutional ownership, analyst recommendations, dividends and earnings.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Covenant Transportation Group and Genesee & Wyoming, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covenant Transportation Group 0 2 2 0 2.50
Genesee & Wyoming 0 5 3 0 2.38

Covenant Transportation Group currently has a consensus target price of $23.00, indicating a potential downside of 7.11%. Genesee & Wyoming has a consensus target price of $75.60, indicating a potential upside of 8.32%. Given Genesee & Wyoming’s higher probable upside, analysts plainly believe Genesee & Wyoming is more favorable than Covenant Transportation Group.

Earnings & Valuation

This table compares Covenant Transportation Group and Genesee & Wyoming’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Covenant Transportation Group $678.55 million 0.67 $97.66 million $0.60 41.27
Genesee & Wyoming $2.08 billion 2.07 $615.42 million $2.29 30.48

Genesee & Wyoming has higher revenue and earnings than Covenant Transportation Group. Genesee & Wyoming is trading at a lower price-to-earnings ratio than Covenant Transportation Group, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Covenant Transportation Group has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500. Comparatively, Genesee & Wyoming has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500.

Profitability

This table compares Covenant Transportation Group and Genesee & Wyoming’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Covenant Transportation Group 1.60% 4.65% 1.77%
Genesee & Wyoming 6.64% 6.32% 2.63%

Insider & Institutional Ownership

62.1% of Covenant Transportation Group shares are owned by institutional investors. Comparatively, 96.2% of Genesee & Wyoming shares are owned by institutional investors. 35.2% of Covenant Transportation Group shares are owned by insiders. Comparatively, 3.8% of Genesee & Wyoming 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.

Summary

Genesee & Wyoming beats Covenant Transportation Group on 11 of the 14 factors compared between the two stocks.

About Covenant Transportation Group

Covenant Transportation Group, Inc. is a provider of expedited long haul freight transportation, primarily using two-person driver teams in transcontinental lanes. The Company’s services also include refrigerated, dedicated, cross-border, regional and brokerage. The Company’s segments include Truckload and Other. The Truckload segment includes the operations of Covenant Transport, Inc. (Covenant Transport), its flagship operation, which provides expedited long haul, dedicated, temperature-controlled and regional solo-driver service; Southern Refrigerated Transport, Inc. (SRT), which provides primarily long haul, regional, dedicated and intermodal temperature-controlled service, and Star Transportation, Inc. (Star), which provides regional solo-driver and dedicated services, primarily in the southeastern United States. The Company provides truckload transportation services throughout the continental United States, into and out of Mexico, and into and out of portions of Canada.

About Genesee & Wyoming

Genesee & Wyoming Inc. owns and operates freight railroads across the world. As of December 31, 2016, the Company owned or leased 122 freight railroads worldwide that are organized in 10 operating regions. The Company operates through three segments, which include North American Operations, Australian Operations and U.K./European Operations. In North America, the Company has operations in eight regions, such as Central, Coastal (which includes industrial switching and port operations), Midwest, Mountain West (which includes industrial switching operations), Northeast, Pacific, Southern and Canada. Outside the United States, the Company has operations in two regions: Australia and the United Kingdom/Europe (which consists of operations in the United Kingdom, Belgium, Germany, the Netherlands and Poland, as well as the provision of management and technical support through Freightliner to Saudi Arabia Railway Company).

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