Critical Analysis: Swift Transportation (SWFT) & Canadian Pacific Railway Limited (CP)
Swift Transportation (NYSE: SWFT) and Canadian Pacific Railway Limited (NYSE:CP) are both mid-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, valuation, risk and earnings.
This is a breakdown of current ratings and target prices for Swift Transportation and Canadian Pacific Railway Limited, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Canadian Pacific Railway Limited||0||4||18||0||2.82|
Swift Transportation currently has a consensus target price of $27.85, suggesting a potential upside of 2.04%. Canadian Pacific Railway Limited has a consensus target price of $187.72, suggesting a potential upside of 20.81%. Given Canadian Pacific Railway Limited’s stronger consensus rating and higher probable upside, analysts plainly believe Canadian Pacific Railway Limited is more favorable than Swift Transportation.
Earnings & Valuation
This table compares Swift Transportation and Canadian Pacific Railway Limited’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Swift Transportation||$4.01 billion||0.91||$480.95 million||$0.90||30.32|
|Canadian Pacific Railway Limited||$5.13 billion||4.42||$2.64 billion||$8.40||18.50|
Canadian Pacific Railway Limited has higher revenue and earnings than Swift Transportation. Canadian Pacific Railway Limited is trading at a lower price-to-earnings ratio than Swift Transportation, indicating that it is currently the more affordable of the two stocks.
Canadian Pacific Railway Limited pays an annual dividend of $1.67 per share and has a dividend yield of 1.1%. Swift Transportation does not pay a dividend. Canadian Pacific Railway Limited pays out 19.9% of its earnings in the form of a dividend.
Volatility & Risk
Swift Transportation has a beta of 1.96, meaning that its share price is 96% more volatile than the S&P 500. Comparatively, Canadian Pacific Railway Limited has a beta of 1.09, meaning that its share price is 9% more volatile than the S&P 500.
This table compares Swift Transportation and Canadian Pacific Railway Limited’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Canadian Pacific Railway Limited||25.49%||33.06%||8.38%|
Insider & Institutional Ownership
78.8% of Swift Transportation shares are owned by institutional investors. Comparatively, 70.5% of Canadian Pacific Railway Limited shares are owned by institutional investors. 44.9% of Swift Transportation shares are owned by insiders. Comparatively, 0.0% of Canadian Pacific Railway Limited shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
Canadian Pacific Railway Limited beats Swift Transportation on 11 of the 16 factors compared between the two stocks.
About Swift Transportation
Swift Transportation Company is a multi-faceted transportation services company. As of December 31, 2016, the Company operated fleets of truckload equipment in North America from over 40 terminals near key freight centers and traffic lanes. The Company’ segments include Truckload, Dedicated, Swift Refrigerated and Intermodal. The Company’s other segments include its logistics and freight brokerage services, as well as support services that its subsidiaries provide to customers and owner-operators, including repair and maintenance shop services, equipment leasing, and insurance. As of December 31, 2016, the Company’s fleet consisted of 13,937 company tractors and 4,429 owner-operator tractors, as well as 64,066 trailers, and 9,131 intermodal containers. Its suite of service offerings include line-haul services, dedicated customer contracts, temperature-controlled units, intermodal freight solutions, flatbed hauling, freight brokerage and logistics.
About Canadian Pacific Railway Limited
Canadian Pacific Railway Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States. The Company operates through rail transportation segment. The Company’s transports bulk commodities, merchandise freight, and intermodal traffic over a network of approximately 12,400 miles. Its railway feeds directly into the United States heartland from the east and west coasts. Its Bulk commodities include grain, coal, potash, fertilizers and sulfur. Its Merchandise freight consists of finished vehicles and machinery, as well as forest and industrial and consumer products. Its Intermodal traffic consists of retail goods in overseas containers that can be transported by train, ship and truck and in domestic containers and trailers that can be moved by train and truck. Its subsidiaries include Canadian Pacific Railway Company, Soo Line Railroad Company, Delaware and Hudson Railway Company, Inc. and Mount Stephen Properties Inc.
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