Knight-Swift Transportation (NYSE: KNX) and Old Dominion Freight Line (NASDAQ:ODFL) are both mid-cap transportation companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Dividends

Knight-Swift Transportation pays an annual dividend of $0.06 per share and has a dividend yield of 0.1%. Old Dominion Freight Line pays an annual dividend of $0.40 per share and has a dividend yield of 0.3%. Knight-Swift Transportation pays out 6.7% of its earnings in the form of a dividend. Old Dominion Freight Line pays out 9.9% 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. Knight-Swift Transportation has increased its dividend for 4 consecutive years.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Knight-Swift Transportation and Old Dominion Freight Line, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knight-Swift Transportation 1 4 12 0 2.65
Old Dominion Freight Line 2 5 5 0 2.25

Knight-Swift Transportation presently has a consensus price target of $42.00, suggesting a potential downside of 6.42%. Old Dominion Freight Line has a consensus price target of $112.18, suggesting a potential downside of 17.88%. Given Knight-Swift Transportation’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Knight-Swift Transportation is more favorable than Old Dominion Freight Line.

Institutional & Insider Ownership

78.2% of Knight-Swift Transportation shares are owned by institutional investors. Comparatively, 72.4% of Old Dominion Freight Line shares are owned by institutional investors. 9.9% of Knight-Swift Transportation shares are owned by company insiders. Comparatively, 12.0% of Old Dominion Freight Line shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Knight-Swift Transportation has a beta of 2.03, suggesting that its share price is 103% more volatile than the S&P 500. Comparatively, Old Dominion Freight Line has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Profitability

This table compares Knight-Swift Transportation and Old Dominion Freight Line’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knight-Swift Transportation 2.44% 7.48% 3.31%
Old Dominion Freight Line 10.43% 17.09% 11.93%

Earnings and Valuation

This table compares Knight-Swift Transportation and Old Dominion Freight Line’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Knight-Swift Transportation $4.03 billion 1.98 $149.26 million $0.90 49.81
Old Dominion Freight Line $2.99 billion 3.76 $295.76 million $4.06 33.65

Old Dominion Freight Line has lower revenue, but higher earnings than Knight-Swift Transportation. Old Dominion Freight Line is trading at a lower price-to-earnings ratio than Knight-Swift Transportation, indicating that it is currently the more affordable of the two stocks.

Summary

Knight-Swift Transportation beats Old Dominion Freight Line on 9 of the 17 factors compared between the two stocks.

About Knight-Swift Transportation

Knight Transportation, Inc. is a provider of multiple truckload transportation and logistics services, which involve the movement of trailer or container loads of freight from origin to destination for a single customer. The Company operates through two segments: Trucking and Logistics. Its Trucking segment consists of three operating units: dry van truckload, temperature-controlled truckload and drayage services. The Trucking segment provides truckload transportation, including services of various products, goods and materials. Its Logistics segment consists of two operating units: freight brokerage services and rail intermodal. It provides logistics, freight management and other non-trucking services to its customers, through its Logistics segment. It provides a range of truckload and logistics services through its nationwide network of service centers, truckload tractor fleets and its contractual access to third-party capacity providers. It operates primarily in the United States.

About Old Dominion Freight Line

Old Dominion Freight Line, Inc. is a union-free motor carrier providing regional, inter-regional and national less-than-truckload (LTL) services. The Company’s LTL services include ground and air expedited transportation for time-sensitive shipments, consumer household pickup and delivery and freight delivery services throughout North America. In addition to its LTL services, the Company offers a range of other value-added services that include container drayage, truckload brokerage, supply chain consulting and warehousing. As of December 31, 2016, the Company operated 226 service center locations, of which it owned 182 and leased 44. As of December 31, 2016, its network included 10 breakbulk facilities located in Rialto, California; Atlanta, Georgia; Columbus, Ohio; Indianapolis, Indiana; Greensboro, North Carolina; Harrisburg, Pennsylvania; Memphis and Morristown, Tennessee; Dallas, Texas, and Salt Lake City, Utah. As of December 31, 2016, the Company owned 7,994 tractors.

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