Critical Review: Marten Transport (NASDAQ:MRTN) & Canadian Pacific Kansas City (NYSE:CP)

Canadian Pacific Kansas City (NYSE:CP) and Marten Transport (NASDAQ:MRTN) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their risk, dividends, valuation, institutional ownership, profitability, earnings and analyst recommendations.

Risk & Volatility

Canadian Pacific Kansas City has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500. Comparatively, Marten Transport has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Dividends

Canadian Pacific Kansas City pays an annual dividend of $0.76 per share and has a dividend yield of 0.8%. Marten Transport pays an annual dividend of $0.24 per share and has a dividend yield of 2.0%. Canadian Pacific Kansas City pays out 24.4% of its earnings in the form of a dividend. Marten Transport pays out 133.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Canadian Pacific Kansas City and Marten Transport’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canadian Pacific Kansas City	24.14%	9.27%	4.96%
Marten Transport	1.55%	1.74%	1.40%

Institutional & Insider Ownership

72.2% of Canadian Pacific Kansas City shares are held by institutional investors. Comparatively, 69.1% of Marten Transport shares are held by institutional investors. 0.0% of Canadian Pacific Kansas City shares are held by insiders. Comparatively, 22.6% of Marten Transport 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.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Canadian Pacific Kansas City and Marten Transport, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canadian Pacific Kansas City	0	4	12	1	2.82
Marten Transport	1	2	0	1	2.25

Canadian Pacific Kansas City currently has a consensus target price of $112.58, indicating a potential upside of 19.91%. Marten Transport has a consensus target price of $12.50, indicating a potential upside of 3.22%. Given Canadian Pacific Kansas City’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Canadian Pacific Kansas City is more favorable than Marten Transport.

Earnings & Valuation

This table compares Canadian Pacific Kansas City and Marten Transport”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canadian Pacific Kansas City	$16.01 billion	5.11	$2.96 billion	$3.12	30.09
Marten Transport	$883.65 million	1.12	$17.44 million	$0.18	67.28

Canadian Pacific Kansas City has higher revenue and earnings than Marten Transport. Canadian Pacific Kansas City is trading at a lower price-to-earnings ratio than Marten Transport, indicating that it is currently the more affordable of the two stocks.

Summary

Canadian Pacific Kansas City beats Marten Transport on 13 of the 16 factors compared between the two stocks.

About Canadian Pacific Kansas City

Canadian Pacific Kansas City Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada, the United States, and Mexico. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; merchandise freight, such as forest products, energy, chemicals and plastics, metals, minerals, consumer products, and automotive; and intermodal traffic comprising retail goods in overseas containers. It also provides rail and intermodal transportation services over a network of approximately 20,000 miles serving business centres. The company was formerly known as Canadian Pacific Railway Limited and changed its name to Canadian Pacific Kansas City Limited in April 2023. Canadian Pacific Kansas City Limited was incorporated in 1881 and is headquartered in Calgary, Canada.

About Marten Transport

Marten Transport, Ltd. operates as a temperature-sensitive truckload carrier for shippers in the United State, Mexico, and Canada. The company operates through four segments: Truckload, Dedicated, Intermodal, and Brokerage. The Truckload segment transports food and other consumer packaged goods that require a temperature-controlled or insulated environment, as well as dry freight; and regional short-haul and medium-to-long-haul full-load transportation services. The Dedicated segment offers customized transportation solutions for individual customers' requirements using temperature-controlled trailers, dry vans, and other specialized equipment. The Intermodal segment transports customers' freight utilizing its refrigerated containers and temperature-controlled trailers on railroad flatcars for portions of trips, as well as using tractors and contracted carriers. The Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for customers in temperature-controlled trailers and dry vans. As of December 31, 2023, the company operated a fleet of 3,349 tractors, that included 3,255 company-owned tractors and 94 tractors supplied by independent contractors. Marten Transport, Ltd. was founded in 1946 and is headquartered in Mondovi, Wisconsin.