Hub Group (NASDAQ:HUBG) & RXO (NYSE:RXO) Critical Contrast

Hub Group (NASDAQ:HUBG) and RXO (NYSE:RXO) are both mid-cap transportation companies, but which is the superior stock? We will compare the two businesses based on the strength of their earnings, risk, valuation, profitability, dividends, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Hub Group and RXO, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hub Group	0	4	5	1	2.70
RXO	1	12	3	0	2.13

Hub Group presently has a consensus price target of $39.13, suggesting a potential upside of 13.60%. RXO has a consensus price target of $16.92, suggesting a potential upside of 9.96%. Given Hub Group’s stronger consensus rating and higher probable upside, research analysts clearly believe Hub Group is more favorable than RXO.

Risk & Volatility

Hub Group has a beta of 1.15, suggesting that its stock price is 15% more volatile than the S&P 500. Comparatively, RXO has a beta of 1.69, suggesting that its stock price is 69% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Hub Group	2.65%	6.81%	4.06%
RXO	-5.45%	1.18%	0.57%

Valuation & Earnings

This table compares Hub Group and RXO”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hub Group	$3.95 billion	0.53	$103.99 million	$1.65	20.87
RXO	$4.55 billion	0.55	-$290.00 million	($2.16)	-7.13

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

Insider & Institutional Ownership

46.8% of Hub Group shares are owned by institutional investors. Comparatively, 92.7% of RXO shares are owned by institutional investors. 3.5% of Hub Group shares are owned by company insiders. Comparatively, 1.5% of RXO shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Summary

Hub Group beats RXO on 11 of the 15 factors compared between the two stocks.

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.

About RXO

RXO, Inc. provides full truckload freight transportation brokering services. It also offers brokered services for managed transportation, last mile, and freight forwarding. The company was incorporated in 2022 and is based in Charlotte, North Carolina.