Critical Contrast: Hub Group (NASDAQ:HUBG) vs. Universal Logistics (NASDAQ:ULH)

Universal Logistics (NASDAQ:ULH) and Hub Group (NASDAQ:HUBG) are both transportation companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, analyst recommendations, institutional ownership, risk, earnings, valuation and dividends.

Dividends

Universal Logistics pays an annual dividend of $0.42 per share and has a dividend yield of 1.7%. Hub Group pays an annual dividend of $0.50 per share and has a dividend yield of 1.3%. Universal Logistics pays out 18.0% of its earnings in the form of a dividend. Hub Group pays out 30.3% 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. Universal Logistics is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Universal Logistics has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Hub Group has a beta of 1.15, meaning that its stock price is 15% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Universal Logistics and Hub Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Logistics	0	1	0	0	2.00
Hub Group	0	4	5	1	2.70

Universal Logistics presently has a consensus price target of $29.00, suggesting a potential upside of 16.37%. Hub Group has a consensus price target of $40.35, suggesting a potential upside of 7.37%. Given Universal Logistics’ higher probable upside, analysts clearly believe Universal Logistics is more favorable than Hub Group.

Earnings and Valuation

This table compares Universal Logistics and Hub Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Logistics	$1.85 billion	0.36	$129.91 million	$2.33	10.70
Hub Group	$3.95 billion	0.58	$103.99 million	$1.65	22.78

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

Profitability

This table compares Universal Logistics and Hub Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Logistics	3.66%	9.47%	3.49%
Hub Group	2.65%	6.81%	4.06%

Institutional & Insider Ownership

25.5% of Universal Logistics shares are owned by institutional investors. Comparatively, 46.8% of Hub Group shares are owned by institutional investors. 73.6% of Universal Logistics shares are owned by insiders. Comparatively, 3.5% of Hub Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Hub Group beats Universal Logistics on 9 of the 17 factors compared between the two stocks.

About Universal Logistics

Universal Logistics Holdings, Inc. provides transportation and logistics solutions in the United States, Mexico, Canada, and Colombia. The company offers truckload services, which include dry van, flatbed, heavy-haul, and refrigerated operations; domestic and international freight forwarding, and customs brokerage services. It transports various commodities comprising automotive parts, machinery, building materials, paper, food, consumer goods, furniture, steel, and other metals. The company also provides value-added services for individual customer requirements, including material handling, consolidation, sequencing, sub-assembly, cross-dock, kitting, repacking, warehousing, and returnable container management; and intermodal support services comprising short-to-medium distance delivery of steamship and rail truck containers between the port or railhead, and the customer. It serves automotive, steel, and other metals, retail and consumer goods, energy, and manufacturing industries, as well as other transportation companies who aggregate loads from various shippers. The company was formerly known as Universal Truckload Services, Inc. and changed its name to Universal Logistics Holdings, Inc. in April 2016. Universal Logistics Holdings, Inc. was founded in 1932 and is headquartered in Warren, Michigan.

About Hub Group

Hub Group, Inc., a supply chain solutions provider, offers transportation and logistics management services in North America. The company's transportation services include intermodal, truckload, less-than-truckload, flatbed, temperature-controlled, and dedicated and regional trucking, as well as final mile, railcar, small parcel, and international transportation. Its logistics services comprise full outsource logistics solution, transportation management, freight consolidation, warehousing and fulfillment, final mile delivery, and parcel and international services. The company also provides dry van, expedited, less-than-truckload, refrigerated, and flatbed truck brokerage services. It offers a fleet of approximately 2,300 tractors, 460 independent owner-operators, and 4,300 trailers to its customers, as well as the management and infrastructure. The company serves a range of industries, including retail, consumer products, and durable goods. As of December 31, 2023, it owned approximately 50,000 dry, 53-foot containers, as well as 900 refrigerated and 53-foot containers. The company was founded in 1971 and is headquartered in Oak Brook, Illinois.