Knight-Swift Transportation (NYSE:KNX – Get Free Report) and Union Pacific (NYSE:UNP – Get Free Report) are both large-cap industrials companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, profitability, dividends, analyst recommendations, risk and institutional ownership.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Knight-Swift Transportation and Union Pacific, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Knight-Swift Transportation | 0 | 3 | 15 | 2 | 2.95 |
| Union Pacific | 0 | 4 | 15 | 2 | 2.90 |
Knight-Swift Transportation presently has a consensus price target of $85.67, indicating a potential upside of 30.86%. Union Pacific has a consensus price target of $327.00, indicating a potential upside of 20.12%. Given Knight-Swift Transportation’s stronger consensus rating and higher probable upside, analysts plainly believe Knight-Swift Transportation is more favorable than Union Pacific.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Knight-Swift Transportation | 0.56% | 3.51% | 2.04% |
| Union Pacific | 28.85% | 38.46% | 10.45% |
Valuation and Earnings
This table compares Knight-Swift Transportation and Union Pacific”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Knight-Swift Transportation | $7.47 billion | 1.43 | $65.95 million | $0.26 | 251.78 |
| Union Pacific | $24.51 billion | 6.60 | $7.14 billion | $12.35 | 22.04 |
Union Pacific has higher revenue and earnings than Knight-Swift Transportation. Union Pacific 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.
Dividends
Knight-Swift Transportation pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Union Pacific pays an annual dividend of $5.68 per share and has a dividend yield of 2.1%. Knight-Swift Transportation pays out 307.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Union Pacific pays out 46.0% of its earnings in the form of a dividend. Knight-Swift Transportation has increased its dividend for 6 consecutive years and Union Pacific has increased its dividend for 18 consecutive years. Union Pacific is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Volatility & Risk
Knight-Swift Transportation has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Union Pacific has a beta of 0.95, meaning that its share price is 5% less volatile than the S&P 500.
Institutional & Insider Ownership
88.8% of Knight-Swift Transportation shares are owned by institutional investors. Comparatively, 80.4% of Union Pacific shares are owned by institutional investors. 2.9% of Knight-Swift Transportation shares are owned by insiders. Comparatively, 0.2% of Union Pacific shares are owned by 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
Union Pacific beats Knight-Swift Transportation on 10 of the 16 factors compared between the two stocks.
About Knight-Swift Transportation
Knight-Swift Transportation Holdings Inc., together with its subsidiaries, provides freight transportation services in the United States and Mexico. The company operates through four segments: Truckload, Less-than-truckload (LTL), Logistics, and Intermodal. The Truckload segment provides transportation services, which include irregular route and dedicated, refrigerated, expedited, flatbed, and cross-border operations. This segment operated an average of 20,948 tractors, which comprised 18,821 company tractors and 2,127 independent contractor tractors, as well as 87,865 trailers. The LTL segment provides regional LTL transportation services through a network of approximately 120 service centers; and offers national coverage through partner carrier outside the network. This segment operated an average of 3,201 tractors and 8,482 trailers. The Logistic segment offers brokerage and other freight management services through third-party transportation providers and equipment. The Intermodal segment offers transportation services, including freight through third-party intermodal rail services on trailing equipment, such as containers and trailers on flat cars; and drayage services. This segment operated an average of 639 tractors and 12,730 intermodal containers. The company also provides repair and maintenance shop, equipment leasing, warranty, and insurance services; and warehousing and driving academy services, as well as manufactures trailer parts. It serves retail, food and beverage, consumer and paper products, transportation and logistics, housing, and building, automotive, and manufacturing industries. Knight-Swift Transportation Holdings Inc. was incorporated in 1989 and is headquartered in Phoenix, Arizona.
About Union Pacific
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska.
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