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

Institutional & Insider Ownership

83.6% of Kansas City Southern shares are owned by institutional investors. Comparatively, 21.5% of Schneider National shares are owned by institutional investors. 1.0% of Kansas City Southern shares are owned by company 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Kansas City Southern and Schneider National, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kansas City Southern 0 7 9 0 2.56
Schneider National 0 3 8 0 2.73

Kansas City Southern currently has a consensus target price of $112.20, suggesting a potential upside of 0.41%. Schneider National has a consensus target price of $24.50, suggesting a potential downside of 9.33%. Given Kansas City Southern’s higher possible upside, equities research analysts plainly believe Kansas City Southern is more favorable than Schneider National.

Dividends

Kansas City Southern pays an annual dividend of $1.44 per share and has a dividend yield of 1.3%. Schneider National pays an annual dividend of $0.20 per share and has a dividend yield of 0.7%. Kansas City Southern pays out 28.3% of its earnings in the form of a dividend. Schneider National has raised its dividend for 3 consecutive years.

Profitability

This table compares Kansas City Southern and Schneider National’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Kansas City Southern 21.42% 11.86% 5.88%
Schneider National 3.61% 10.79% 4.79%

Valuation and Earnings

This table compares Kansas City Southern and Schneider National’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Kansas City Southern $2.33 billion 4.96 $478.10 million $5.09 21.95
Schneider National $4.05 billion 1.18 $156.85 million N/A N/A

Kansas City Southern has higher earnings, but lower revenue than Schneider National.

Summary

Kansas City Southern beats Schneider National on 10 of the 14 factors compared between the two stocks.

Kansas City Southern Company Profile

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.

Schneider National Company Profile

Schneider National, Inc. is a provider of transportation, logistics and related services. The Company’s transportation solutions include one-way, intermodal, dedicated, bulk, transport management, trans loading services, international services and Schneider payment services. Its supply chain management and consulting services include logistics solution design, global supply chain services, enterprise and market entry assistance, and sourcing and compliance. Schneider Logistics is the subsidiary of the Company, which provides supply chain management technology, managed services, engineering services and freight payment. The Company operates approximately 10,000 tractors, around 28,800 trailers and around 14,300 containers. It has operations in around 36 locations in Canada, the United States and Mexico.

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