Genesee & Wyoming (NYSE: GWR) and Canadian Pacific Railway Limited (NYSE:CP) are both mid-cap transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, valuation, profitability, analyst recommendations, institutional ownership, risk and dividends.

Dividends

Canadian Pacific Railway Limited pays an annual dividend of $1.80 per share and has a dividend yield of 1.1%. Genesee & Wyoming does not pay a dividend. Canadian Pacific Railway Limited pays out 21.4% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Genesee & Wyoming and Canadian Pacific Railway Limited’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Genesee & Wyoming $2.08 billion 2.19 $615.42 million $2.29 32.32
Canadian Pacific Railway Limited $5.30 billion 4.63 $2.72 billion $8.40 20.00

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

Profitability

This table compares Genesee & Wyoming and Canadian Pacific Railway Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genesee & Wyoming 6.64% 6.32% 2.63%
Canadian Pacific Railway Limited 25.49% 33.06% 8.38%

Risk and Volatility

Genesee & Wyoming has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500. Comparatively, Canadian Pacific Railway Limited has a beta of 1.11, meaning that its stock price is 11% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations for Genesee & Wyoming and Canadian Pacific Railway Limited, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesee & Wyoming 0 5 3 0 2.38
Canadian Pacific Railway Limited 0 4 19 0 2.83

Genesee & Wyoming presently has a consensus price target of $75.60, indicating a potential upside of 2.15%. Canadian Pacific Railway Limited has a consensus price target of $188.74, indicating a potential upside of 12.32%. Given Canadian Pacific Railway Limited’s stronger consensus rating and higher possible upside, analysts plainly believe Canadian Pacific Railway Limited is more favorable than Genesee & Wyoming.

Institutional & Insider Ownership

96.1% of Genesee & Wyoming shares are owned by institutional investors. Comparatively, 65.9% of Canadian Pacific Railway Limited shares are owned by institutional investors. 3.8% of Genesee & Wyoming shares are owned by company insiders. Comparatively, 0.0% of Canadian Pacific Railway Limited shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Canadian Pacific Railway Limited beats Genesee & Wyoming on 11 of the 16 factors compared between the two stocks.

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).

About Canadian Pacific Railway Limited

Canadian Pacific Railway Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States. The Company operates through rail transportation segment. The Company’s transports bulk commodities, merchandise freight, and intermodal traffic over a network of approximately 12,400 miles. Its railway feeds directly into the United States heartland from the east and west coasts. Its Bulk commodities include grain, coal, potash, fertilizers and sulfur. Its Merchandise freight consists of finished vehicles and machinery, as well as forest and industrial and consumer products. Its Intermodal traffic consists of retail goods in overseas containers that can be transported by train, ship and truck and in domestic containers and trailers that can be moved by train and truck. Its subsidiaries include Canadian Pacific Railway Company, Soo Line Railroad Company, Delaware and Hudson Railway Company, Inc. and Mount Stephen Properties Inc.

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