Critical Review: Saia (SAIA) and Knight Transportation (NYSE:KNX)

Knight Transportation (NYSE: KNX) and Saia (NASDAQ:SAIA) are both transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, analyst recommendations, profitability, dividends and risk.

Dividends

Knight Transportation pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Saia does not pay a dividend. Knight Transportation pays out 25.0% of its earnings in the form of a dividend. Knight Transportation has increased its dividend for 3 consecutive years.

Valuation and Earnings

This table compares Knight Transportation and Saia’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Knight Transportation $1.11 billion 2.65 $243.34 million $0.96 38.13
Saia $1.29 billion 1.04 $168.48 million $2.06 25.70

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

Insider and Institutional Ownership

87.9% of Knight Transportation shares are owned by institutional investors. Comparatively, 98.4% of Saia shares are owned by institutional investors. 9.9% of Knight Transportation shares are owned by company insiders. Comparatively, 1.5% of Saia shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for Knight Transportation and Saia, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knight Transportation 1 4 8 0 2.54
Saia 0 2 4 0 2.67

Knight Transportation currently has a consensus target price of $37.62, suggesting a potential upside of 2.77%. Saia has a consensus target price of $52.60, suggesting a potential downside of 0.66%. Given Knight Transportation’s higher possible upside, equities analysts clearly believe Knight Transportation is more favorable than Saia.

Risk & Volatility

Knight Transportation has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500. Comparatively, Saia has a beta of 0.78, indicating that its share price is 22% less volatile than the S&P 500.

Profitability

This table compares Knight Transportation and Saia’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knight Transportation 7.03% 10.39% 7.61%
Saia 4.12% 10.84% 6.12%

Summary

Knight Transportation beats Saia on 11 of the 17 factors compared between the two stocks.

Knight Transportation Company Profile

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.

Saia Company Profile

Saia, Inc. is a transportation company. The Company provides regional and interregional less-than-truckload (LTL) services. The Company also offers a range of other value-added services, including non-asset truckload, expedited and logistics services across the United States. The Company’s subsidiary Saia Motor Freight Line, LLC (Saia LTL Freight) is a LTL carrier. As of December 31, 2016, Saia LTL Freight had served 34 states in the South, Southwest, Midwest, Pacific Northwest and West. Saia LTL Freight specializes in offering its customers a range of regional and interregional LTL services, including time-definite and expedited options. As of December 31, 2016, Saia LTL Freight operated a network consisting of 151 owned and leased locations. The Company’s other subsidiaries include Saia TL Plus, LLC, Saia Logistics Services, LLC, Saia Sales, LLC, Saia Metrogo, LLC, LinkEx, Inc. and Saia Motor Freight Mexico, S. DE R.L. DE C.V.

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