Analyzing Heartland Express (NASDAQ:HTLD) and Norfolk Southern (NYSE:NSC)

Norfolk Southern (NYSE:NSC) and Heartland Express (NASDAQ:HTLD) are both industrials companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, analyst recommendations and dividends.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Norfolk Southern and Heartland Express, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Norfolk Southern	0	14	7	0	2.33
Heartland Express	3	3	1	0	1.71

Norfolk Southern presently has a consensus price target of $348.75, indicating a potential upside of 10.18%. Heartland Express has a consensus price target of $13.00, indicating a potential upside of 11.31%. Given Heartland Express’ higher possible upside, analysts clearly believe Heartland Express is more favorable than Norfolk Southern.

Valuation & Earnings

This table compares Norfolk Southern and Heartland Express”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Norfolk Southern	$12.18 billion	5.84	$2.87 billion	$11.72	27.01
Heartland Express	$805.71 million	1.12	-$52.45 million	($0.28)	-41.71

Norfolk Southern has higher revenue and earnings than Heartland Express. Heartland Express is trading at a lower price-to-earnings ratio than Norfolk Southern, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Norfolk Southern has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, Heartland Express has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Institutional and Insider Ownership

75.1% of Norfolk Southern shares are held by institutional investors. Comparatively, 53.4% of Heartland Express shares are held by institutional investors. 0.1% of Norfolk Southern shares are held by company insiders. Comparatively, 41.6% of Heartland Express shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Norfolk Southern and Heartland Express’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Norfolk Southern	21.02%	18.21%	6.34%
Heartland Express	-2.98%	-0.92%	-0.58%

Dividends

Norfolk Southern pays an annual dividend of $5.40 per share and has a dividend yield of 1.7%. Heartland Express pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. Norfolk Southern pays out 46.1% of its earnings in the form of a dividend. Heartland Express pays out -28.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Summary

Norfolk Southern beats Heartland Express on 12 of the 16 factors compared between the two stocks.

About Norfolk Southern

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The company transports agriculture, forest, and consumer products comprising soybeans, wheat, corn, fertilizers, livestock and poultry feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper products, wood fibers, wood pulp, beverages, and canned goods; chemicals consist of sulfur and related chemicals, petroleum products comprising crude oil, chlorine and bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, sand, and natural gas liquids; metals and construction materials, such as steel, aluminum products, machinery, scrap metals, cement, aggregates, minerals, clay, transportation equipment, and military-related products; and automotive, including finished motor vehicles and automotive parts, as well as coal. It also transports overseas freight through various Atlantic and Gulf Coast ports; and operates an intermodal network. As of December 31, 2023, the company operated approximately 19,100 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is headquartered in Atlanta, Georgia.

About Heartland Express

Heartland Express, Inc., together with its subsidiaries, operates as a short-to-medium, and long-haul truckload carrier in the United States and Canada. It primarily provides nationwide asset-based dry van truckload service for shippers; cross-border freight and other transportation services; and temperature-controlled truckload services. The company offers its services under the Heartland Express and Millis Transfer brand names. It primarily serves retailers and manufacturers in consumer goods, appliances, food products, and automotive industries. The company was founded in 1978 and is headquartered in North Liberty, Iowa.