ArcBest Corporation (NASDAQ: ARCB) and Covenant Transportation Group (NASDAQ:CVTI) are both small-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.
This is a breakdown of current ratings and price targets for ArcBest Corporation and Covenant Transportation Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Covenant Transportation Group||0||3||1||0||2.25|
ArcBest Corporation presently has a consensus price target of $25.50, suggesting a potential downside of 3.23%. Covenant Transportation Group has a consensus price target of $21.00, suggesting a potential upside of 7.42%. Given Covenant Transportation Group’s higher probable upside, analysts clearly believe Covenant Transportation Group is more favorable than ArcBest Corporation.
Insider & Institutional Ownership
86.4% of ArcBest Corporation shares are held by institutional investors. Comparatively, 62.4% of Covenant Transportation Group shares are held by institutional investors. 1.0% of ArcBest Corporation shares are held by company insiders. Comparatively, 35.4% of Covenant Transportation Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares ArcBest Corporation and Covenant Transportation Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ArcBest Corporation||$2.77 billion||0.24||$146.23 million||$0.86||30.64|
|Covenant Transportation Group||$678.55 million||0.53||$97.73 million||$0.60||32.58|
ArcBest Corporation has higher revenue and earnings than Covenant Transportation Group. ArcBest Corporation is trading at a lower price-to-earnings ratio than Covenant Transportation Group, indicating that it is currently the more affordable of the two stocks.
ArcBest Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Covenant Transportation Group does not pay a dividend. ArcBest Corporation pays out 37.2% of its earnings in the form of a dividend.
Volatility and Risk
ArcBest Corporation has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500. Comparatively, Covenant Transportation Group has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.
This table compares ArcBest Corporation and Covenant Transportation Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Covenant Transportation Group||1.60%||4.68%||1.78%|
ArcBest Corporation beats Covenant Transportation Group on 9 of the 16 factors compared between the two stocks.
About ArcBest Corporation
ArcBest Corporation is a holding company of businesses providing integrated logistics solutions. The Company operates through three segments: Asset-Based, which consists of ABF Freight System, Inc. and other subsidiaries; ArcBest, which represents the consolidation of the operations of the Premium Logistics, Transportation Management and Household Goods Moving Services segments, and FleetNet, which includes the results of operations of FleetNet America, Inc. (FleetNet). Its Asset-Based operations offer transportation of general commodities through standard, time-critical, expedited and guaranteed LTL services-nationally and regionally. Its ArcBest segment includes truckload, expedite, international, warehousing, freight transportation, management services and moving services. Its FleetNet segment provides roadside assistance and maintenance management services for commercial vehicles to customers in the United States and Canada through a network of third-party service providers.
About Covenant Transportation Group
Covenant Transportation Group, Inc. is a provider of expedited long haul freight transportation, primarily using two-person driver teams in transcontinental lanes. The Company’s services also include refrigerated, dedicated, cross-border, regional and brokerage. The Company’s segments include Truckload and Other. The Truckload segment includes the operations of Covenant Transport, Inc. (Covenant Transport), its flagship operation, which provides expedited long haul, dedicated, temperature-controlled and regional solo-driver service; Southern Refrigerated Transport, Inc. (SRT), which provides primarily long haul, regional, dedicated and intermodal temperature-controlled service, and Star Transportation, Inc. (Star), which provides regional solo-driver and dedicated services, primarily in the southeastern United States. The Company provides truckload transportation services throughout the continental United States, into and out of Mexico, and into and out of portions of Canada.
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