Swift Transportation (NYSE: KNX) and Landstar System (NASDAQ:LSTR) are both mid-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Institutional and Insider Ownership

97.0% of Landstar System shares are held by institutional investors. 9.9% of Swift Transportation shares are held by company insiders. Comparatively, 1.0% of Landstar System shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Swift Transportation has a beta of 1.97, indicating that its share price is 97% more volatile than the S&P 500. Comparatively, Landstar System has a beta of 0.76, indicating that its share price is 24% less volatile than the S&P 500.

Earnings & Valuation

This table compares Swift Transportation and Landstar System’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Swift Transportation $1.11 billion 2.94 $243.34 million $1.25 32.38
Landstar System $3.33 billion 1.26 $271.70 million $3.46 28.99

Landstar System has higher revenue and earnings than Swift Transportation. Landstar System is trading at a lower price-to-earnings ratio than Swift Transportation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Swift Transportation and Landstar System’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Swift Transportation 2.99% 22.23% 5.56%
Landstar System 4.37% 26.11% 13.28%

Analyst Recommendations

This is a breakdown of current ratings for Swift Transportation and Landstar System, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Swift Transportation 1 3 10 0 2.64
Landstar System 2 4 3 0 2.11

Swift Transportation presently has a consensus price target of $39.64, indicating a potential downside of 2.04%. Landstar System has a consensus price target of $89.75, indicating a potential downside of 10.52%. Given Swift Transportation’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Swift Transportation is more favorable than Landstar System.

Dividends

Landstar System pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Swift Transportation does not pay a dividend. Landstar System pays out 11.6% of its earnings in the form of a dividend. Swift Transportation has increased its dividend for 3 consecutive years.

Summary

Landstar System beats Swift Transportation on 9 of the 17 factors compared between the two stocks.

About 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 Landstar System

Landstar System, Inc. (Landstar) is an asset-light provider of integrated transportation management solutions. The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to enterprise solutions to manage customer’s transportation needs. It operates in two segments: the Transportation Logistics segment and the Insurance segment. The Transportation Logistics segment provides a range of integrated transportation management solutions. Transportation services offered by it include truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul or specialized, the United States-Canada and the United States-Mexico cross-border, project cargo and customs brokerage. The insurance segment consists of Signature Insurance Company, which is an offshore insurance subsidiary, and Risk Management Claim Services, Inc.

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