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

Profitability

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

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

Institutional and Insider Ownership

95.9% of Genesee & Wyoming shares are held by institutional investors. Comparatively, 90.0% of Hub Group shares are held by institutional investors. 3.5% of Genesee & Wyoming shares are held by insiders. Comparatively, 5.4% of Hub Group shares are held 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.

Risk and Volatility

Genesee & Wyoming has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500. Comparatively, Hub Group has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Genesee & Wyoming and Hub Group, as provided by MarketBeat.com.

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

Genesee & Wyoming presently has a consensus price target of $79.50, indicating a potential upside of 9.70%. Hub Group has a consensus price target of $44.78, indicating a potential upside of 1.19%. Given Genesee & Wyoming’s stronger consensus rating and higher possible upside, analysts clearly believe Genesee & Wyoming is more favorable than Hub Group.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Genesee & Wyoming $2,001.53 2.26 $141.13 $2.11 34.35
Hub Group $3,572.79 0.41 $74.80 $1.61 27.48

Genesee & Wyoming has higher revenue, but lower 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.

Summary

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

Genesee & Wyoming Company Profile

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).

Hub Group Company Profile

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.

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