Critical Analysis: Hub Group (HUBG) versus Genesee & Wyoming (GWR)

Hub Group (NASDAQ: HUBG) and Genesee & Wyoming (NYSE:GWR) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Earnings & Valuation

This table compares Hub Group and Genesee & Wyoming’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hub Group $3.57 billion 0.45 $74.80 million $1.61 29.38
Genesee & Wyoming $2.00 billion 2.44 $141.13 million $2.11 37.11

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

Profitability

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

Net Margins Return on Equity Return on Assets
Hub Group 1.39% 8.87% 4.05%
Genesee & Wyoming 6.10% 5.80% 2.45%

Institutional & Insider Ownership

93.9% of Hub Group shares are owned by institutional investors. Comparatively, 96.2% of Genesee & Wyoming shares are owned by institutional investors. 5.4% of Hub Group shares are owned by insiders. Comparatively, 3.5% of Genesee & Wyoming shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Hub Group has a beta of 1.49, meaning that its share price is 49% more volatile than the S&P 500. Comparatively, Genesee & Wyoming has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Hub Group and Genesee & Wyoming, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hub Group 1 8 4 0 2.23
Genesee & Wyoming 0 4 3 0 2.43

Hub Group currently has a consensus price target of $44.78, indicating a potential downside of 5.33%. Genesee & Wyoming has a consensus price target of $81.25, indicating a potential upside of 3.77%. Given Genesee & Wyoming’s stronger consensus rating and higher probable upside, analysts plainly believe Genesee & Wyoming is more favorable than Hub Group.

Summary

Genesee & Wyoming beats Hub Group on 8 of the 14 factors compared between the two stocks.

About Hub Group

Hub Group, Inc. is an asset-light freight transportation management company. The Company offers intermodal, truck brokerage and logistics services. It operates through two business segments: Mode and Hub. The Mode segment markets and operates its freight transportation services, consisting of intermodal, truck brokerage and logistics, primarily through agents entering into contractual arrangements with Mode Transportation, LLC (Mode LLC). The Mode segment also operates a temperature protected services division. The Hub segment provides intermodal, truck brokerage and logistics services through a network of operating centers throughout the United States, Canada and Mexico. The Hub segment services customers in a range of industries, including consumer products, retail and durable goods. It operates through a network of operating centers and independent business owners. The Company also provides drayage services with its own drayage operations.

About Genesee & Wyoming

Genesee & Wyoming Inc. owns and operates freight railroads across the world. As of December 31, 2016, the Company owned or leased 122 freight railroads worldwide that are organized in 10 operating regions. The Company operates through three segments, which include North American Operations, Australian Operations and U.K./European Operations. In North America, the Company has operations in eight regions, such as Central, Coastal (which includes industrial switching and port operations), Midwest, Mountain West (which includes industrial switching operations), Northeast, Pacific, Southern and Canada. Outside the United States, the Company has operations in two regions: Australia and the United Kingdom/Europe (which consists of operations in the United Kingdom, Belgium, Germany, the Netherlands and Poland, as well as the provision of management and technical support through Freightliner to Saudi Arabia Railway Company).

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