QXO (NYSE:QXO) versus GATX (NYSE:GATX) Critical Analysis

GATX (NYSE:GATX) and QXO (NYSE:QXO) are both industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Earnings and Valuation

This table compares GATX and QXO”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GATX	$1.74 billion	3.36	$333.30 million	$10.10	16.38
QXO	$6.84 billion	1.65	-$279.40 million	($0.90)	-12.07

GATX has higher earnings, but lower revenue than QXO. QXO is trading at a lower price-to-earnings ratio than GATX, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

GATX has a beta of 1.19, suggesting that its share price is 19% more volatile than the S&P 500. Comparatively, QXO has a beta of 2.3, suggesting that its share price is 130% more volatile than the S&P 500.

Profitability

This table compares GATX and QXO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GATX	17.94%	10.43%	2.12%
QXO	-5.17%	2.41%	1.20%

Institutional & Insider Ownership

93.1% of GATX shares are held by institutional investors. Comparatively, 58.7% of QXO shares are held by institutional investors. 1.9% of GATX shares are held by company insiders. Comparatively, 41.0% of QXO shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for GATX and QXO, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GATX	0	0	4	0	3.00
QXO	1	1	15	1	2.89

GATX currently has a consensus price target of $219.33, indicating a potential upside of 32.59%. QXO has a consensus price target of $25.14, indicating a potential upside of 131.54%. Given QXO’s higher possible upside, analysts clearly believe QXO is more favorable than GATX.

Summary

GATX beats QXO on 9 of the 15 factors compared between the two stocks.

About GATX

GATX Corporation, together its subsidiaries, operates as railcar leasing company in the United States, Canada, Mexico, Europe, and India. It operates through three segments: Rail North America, Rail International, and Portfolio Management. The company leases tank and freight railcars, and locomotives for petroleum, chemical, food/agriculture, and transportation industries. It also offers maintenance services, including the interior cleaning of railcars, routine maintenance and repair of car body and safety appliances, regulatory compliance works, wheelset replacements, interior blast and lining, exterior blast and painting, and car stenciling services. In addition, the company manufactures commercial aircraft jet engines and leases aircraft spare engines; and owns and manages tank containers that are leased to chemical, industrial gas, energy, food, cryogenic and pharmaceutical industries, and tank container operators, as well as provides tank container sourcing, remarketing, and inspection and maintenance services. As of December 31, 2023, it owned and operated a fleet of approximately 148,500 railcars; 493 four-axle and 30 six-axle locomotives; 399 aircraft spare engines; and 23,931 tank containers. GATX Corporation was founded in 1898 and is headquartered in Chicago, Illinois.

About QXO

QXO, Inc. operates as a business application, technology, and consulting company in North America. The company provides solutions for accounting and business management, financial reporting, enterprise resource planning, human capital management, warehouse management systems, customer relationship management, and business intelligence. It also offers value-added services that focuses on consulting and professional, specialized programming, training, and technical support services. In addition, the company provides information technology managed services, such as cybersecurity, application hosting, disaster recovery, business continuity, cloud, and other services; and data back-up, network maintenance, and upgrade services. It serves small and medium-sized businesses primarily in the manufacturing, distribution, and service industries. QXO, Inc. is headquartered in Greenwich, Connecticut.