Con-way (NYSE: CNW) and Kansas City Southern (NYSE:KSU) are both industrials companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Profitability

This table compares Con-way and Kansas City Southern’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Con-way 3.09% 14.75% 5.26%
Kansas City Southern 21.42% 11.86% 5.88%

Analyst Recommendations

This is a breakdown of recent ratings for Con-way and Kansas City Southern, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Con-way 0 0 0 0 N/A
Kansas City Southern 0 8 9 0 2.53

Kansas City Southern has a consensus target price of $112.20, indicating a potential upside of 5.43%.

Institutional and Insider Ownership

83.9% of Kansas City Southern shares are held by institutional investors. 1.0% of Kansas City Southern shares are held by 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.

Dividends

Kansas City Southern pays an annual dividend of $1.44 per share and has a dividend yield of 1.4%. Con-way does not pay a dividend. Kansas City Southern pays out 28.3% of its earnings in the form of a dividend. Con-way has raised its dividend for 3 consecutive years and Kansas City Southern has raised its dividend for 3 consecutive years.

Earnings and Valuation

This table compares Con-way and Kansas City Southern’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Con-way N/A N/A N/A $2.34 N/A
Kansas City Southern $2.33 billion 4.72 $478.10 million $5.09 20.91

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

Summary

Kansas City Southern beats Con-way on 8 of the 10 factors compared between the two stocks.

About Con-way

Con-way Inc. (Con-way) provides transportation, logistics and supply-chain management services for a range of manufacturing, industrial and retail customers. The Company’s business units operate in regional, inter-regional and transcontinental less-than-truckload and full-truckload freight transportation, multimodal freight brokerage and trailer manufacturing. The Company operates in three segments: Freight, Logistics and Truckload. The Freight segment consists of the operating results of the Con-way Freight business unit. Con-way Freight is a less-than-truckload motor carrier that utilizes a network of freight service centers to provide day-definite regional, inter-regional and transcontinental less-than-truckload freight services. The Logistics segment consists of the operating results of the Menlo Logistics (Menlo) business unit, which develops contract-logistics solutions. The Truckload segment consists of the operating results of the Con-way Truckload business unit.

About Kansas City Southern

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.

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