Head-To-Head Review: Forward Air Corporation (FWRD) and United Parcel Service (UPS)
Forward Air Corporation (NASDAQ: FWRD) and United Parcel Service (NYSE:UPS) are both transportation companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitabiliy, valuation, analyst recommendations, risk and dividends.
This table compares Forward Air Corporation and United Parcel Service’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Forward Air Corporation||2.88%||13.06%||10.11%|
|United Parcel Service||5.60%||320.39%||13.20%|
This is a breakdown of recent ratings for Forward Air Corporation and United Parcel Service, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Forward Air Corporation||0||4||1||0||2.20|
|United Parcel Service||1||10||5||0||2.25|
Forward Air Corporation currently has a consensus target price of $47.00, suggesting a potential downside of 12.31%. United Parcel Service has a consensus target price of $114.31, suggesting a potential upside of 1.44%. Given United Parcel Service’s stronger consensus rating and higher probable upside, analysts clearly believe United Parcel Service is more favorable than Forward Air Corporation.
Insider & Institutional Ownership
98.2% of Forward Air Corporation shares are held by institutional investors. Comparatively, 53.3% of United Parcel Service shares are held by institutional investors. 2.4% of Forward Air Corporation shares are held by insiders. Comparatively, 0.6% of United Parcel Service shares are held by 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.
Valuation and Earnings
This table compares Forward Air Corporation and United Parcel Service’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Forward Air Corporation||$999.96 million||1.62||$141.81 million||$0.95||56.42|
|United Parcel Service||$61.80 billion||1.58||$7.66 billion||$3.92||28.74|
United Parcel Service has higher revenue and earnings than Forward Air Corporation. United Parcel Service is trading at a lower price-to-earnings ratio than Forward Air Corporation, indicating that it is currently the more affordable of the two stocks.
Forward Air Corporation pays an annual dividend of $0.60 per share and has a dividend yield of 1.1%. United Parcel Service pays an annual dividend of $3.32 per share and has a dividend yield of 2.9%. Forward Air Corporation pays out 63.2% of its earnings in the form of a dividend. United Parcel Service pays out 84.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Forward Air Corporation has raised its dividend for 7 consecutive years.
Volatility and Risk
Forward Air Corporation has a beta of 1.07, indicating that its share price is 7% more volatile than the S&P 500. Comparatively, United Parcel Service has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500.
United Parcel Service beats Forward Air Corporation on 10 of the 17 factors compared between the two stocks.
Forward Air Corporation Company Profile
Forward Air Corporation is a freight and logistics company. The Company provides less-than-truckload (LTL), truckload, intermodal and pool distribution services across the United States and in Canada. The Company’s segments include Expedited LTL, Truckload Premium Services (TLS), Intermodal and Pool Distribution. Expedited LTL segment provides expedited regional, inter-regional and national LTL services. TLS segment is a provider of transportation management services, including, but not limited to, expedited truckload brokerage, fleet services, as well as security and temperature-controlled logistics services in the United States and Canada. Intermodal offers first- and last-mile transportation of freight both to and from seaports and railheads through fleet and third party transportation providers. Pool distribution involves managing high-frequency handling and distribution of time-sensitive product to numerous destinations in specific geographic regions.
United Parcel Service Company Profile
United Parcel Service, Inc. (UPS) is a package delivery company. The Company is a provider of global supply chain management solutions. The Company operates through three segments: U.S. Domestic Package operations, International Package operations, and Supply Chain & Freight operations. As of December 31, 2016, the Company delivered packages in over 220 countries and territories. The Company offers a spectrum of the United States domestic guaranteed ground and air package transportation services. The International Package segment includes the small package operations in Europe, Asia-Pacific, Canada and Latin America, the Indian sub-continent, the Middle East and Africa. The Supply Chain & Freight segment includes its forwarding and logistics services, truckload freight brokerage, UPS Freight and its financial offerings through UPS Capital. The Company serves the global market for logistics services, which include transportation, distribution, contract logistics and ground freight.
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