Ryder System (R) versus Kansas City Southern (KSU) Head-To-Head Review
Ryder System (NYSE: R) and Kansas City Southern (NYSE:KSU) are both mid-cap transportation companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.
This is a summary of current recommendations for Ryder System and Kansas City Southern, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Kansas City Southern||0||10||7||0||2.41|
Ryder System presently has a consensus price target of $77.00, indicating a potential downside of 0.77%. Kansas City Southern has a consensus price target of $103.92, indicating a potential upside of 0.48%. Given Kansas City Southern’s stronger consensus rating and higher possible upside, analysts clearly believe Kansas City Southern is more favorable than Ryder System.
Ryder System pays an annual dividend of $1.84 per share and has a dividend yield of 2.4%. Kansas City Southern pays an annual dividend of $1.32 per share and has a dividend yield of 1.3%. Ryder System pays out 44.1% of its earnings in the form of a dividend. Kansas City Southern pays out 26.5% 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. Ryder System has raised its dividend for 8 consecutive years and Kansas City Southern has raised its dividend for 3 consecutive years. Ryder System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility and Risk
Ryder System has a beta of 1.39, indicating that its stock price is 39% more volatile than the S&P 500. Comparatively, Kansas City Southern has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500.
Valuation and Earnings
This table compares Ryder System and Kansas City Southern’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ryder System||$6.99 billion||0.59||$1.82 billion||$4.17||18.61|
|Kansas City Southern||$2.47 billion||4.41||$1.18 billion||$4.98||20.77|
Ryder System has higher revenue and earnings than Kansas City Southern. Ryder System is trading at a lower price-to-earnings ratio than Kansas City Southern, indicating that it is currently the more affordable of the two stocks.
This table compares Ryder System and Kansas City Southern’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Kansas City Southern||21.52%||11.40%||5.68%|
Insider and Institutional Ownership
89.5% of Ryder System shares are held by institutional investors. Comparatively, 84.5% of Kansas City Southern shares are held by institutional investors. 2.0% of Ryder System shares are held by insiders. Comparatively, 1.0% of Kansas City Southern shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Kansas City Southern beats Ryder System on 9 of the 17 factors compared between the two stocks.
Ryder System Company Profile
Ryder System, Inc. is engaged in offering transportation and supply chain management solutions. The Company operates through three segments: Fleet Management Solutions (FMS), which provides leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the United States, Canada and the United Kingdom; Dedicated Transportation Solutions (DTS), which provides vehicles and drivers as part of a dedicated transportation solution in the United States, and Supply Chain Solutions (SCS), which provides supply chain solutions, including distribution and transportation services in North America and Asia. Through its FMS business, the Company provides its customers with various fleet solutions. In addition, it provides its customers to purchase a selection of used trucks, tractors and trailers through its used vehicle sales program. Its customer base includes enterprises operating in various industries.
Kansas City Southern Company Profile
Kansas City Southern (KCS) is a holding company. The Company has domestic and international rail operations in North America that are focused on the north/south freight corridor connecting commercial and industrial markets in the central United States with industrial cities in Mexico. The Company’s subsidiaries include The Kansas City Southern Railway Company (KCSR) and Kansas City Southern de Mexico, S.A. de C.V. (KCSM). KCSR serves a 10-state region in the midwest and southeast regions of the United States and has the north/south rail route between Kansas City, Missouri and various ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi and Texas. KCSM operates a corridor of the Mexican railroad system. KCSM’s rail lines provide rail access to the United States and Mexico border crossing at Nuevo Laredo, Tamaulipas. KCSM also provides rail access to the Port of Lazaro Cardenas on the Pacific Ocean.
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