Head to Head Analysis: Landstar System (NASDAQ:LSTR) & Canadian Pacific Kansas City (NYSE:CP)

Landstar System (NASDAQ:LSTR) and Canadian Pacific Kansas City (NYSE:CP) are both industrials companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Volatility & Risk

Landstar System has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Canadian Pacific Kansas City has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.

Earnings and Valuation

This table compares Landstar System and Canadian Pacific Kansas City”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Landstar System	$4.74 billion	1.17	$115.01 million	$3.86	42.43
Canadian Pacific Kansas City	$10.79 billion	7.08	$2.96 billion	$3.11	27.95

Canadian Pacific Kansas City has higher revenue and earnings than Landstar System. Canadian Pacific Kansas City is trading at a lower price-to-earnings ratio than Landstar System, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Landstar System and Canadian Pacific Kansas City, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Landstar System	2	11	3	1	2.18
Canadian Pacific Kansas City	0	3	11	1	2.87

Landstar System presently has a consensus price target of $196.00, suggesting a potential upside of 19.68%. Canadian Pacific Kansas City has a consensus price target of $108.60, suggesting a potential upside of 24.94%. Given Canadian Pacific Kansas City’s stronger consensus rating and higher possible upside, analysts plainly believe Canadian Pacific Kansas City is more favorable than Landstar System.

Dividends

Landstar System pays an annual dividend of $1.76 per share and has a dividend yield of 1.1%. Canadian Pacific Kansas City pays an annual dividend of $0.78 per share and has a dividend yield of 0.9%. Landstar System pays out 45.6% of its earnings in the form of a dividend. Canadian Pacific Kansas City pays out 25.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Landstar System has increased its dividend for 10 consecutive years. Landstar System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

98.0% of Landstar System shares are held by institutional investors. Comparatively, 72.2% of Canadian Pacific Kansas City shares are held by institutional investors. 0.7% of Landstar System shares are held by insiders. Comparatively, 0.0% of Canadian Pacific Kansas City shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Landstar System and Canadian Pacific Kansas City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Landstar System	2.64%	20.84%	10.42%
Canadian Pacific Kansas City	25.02%	9.02%	4.86%

Summary

Canadian Pacific Kansas City beats Landstar System on 9 of the 17 factors compared between the two stocks.

About Landstar System

Landstar System, Inc. provides integrated transportation management solutions in the United States, Canada, Mexico, and internationally. It operates through two segments: Transportation Logistics and Insurance. The Transportation Logistics segment offers a range of transportation services, including truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul/specialized, U.S.-Canada and U.S.-Mexico cross-border, intra-Mexico, intra-Canada, project cargo, and customs brokerage, as well as offers transportation services to other transportation companies, such as third party logistics and less-than-truckload services. It provides truck services through dry and specialty vans of various sizes, unsided/platform trailers, temperature-controlled vans, and containers; rail intermodal services through contracts with domestic and Canadian railroads, certain short-line railroads, and asset-based intermodal equipment; and domestic and international air and ocean services. This segment serves the automotive parts and assemblies, consumer durables, building products, metals, chemicals, foodstuffs, heavy machinery, retail, electronics, and military equipment industries. The Insurance segment provides risk and claims management services; and reinsures risks of the company's independent contractors. It markets its services through independent commission sales agents and third party capacity providers. Landstar System, Inc. was incorporated in 1991 and is headquartered in Jacksonville, Florida.

About Canadian Pacific Kansas City

Canadian Pacific Kansas City Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada, the United States, and Mexico. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; merchandise freight, such as forest products, energy, chemicals and plastics, metals, minerals, consumer products, and automotive; and intermodal traffic comprising retail goods in overseas containers. It also provides rail and intermodal transportation services over a network of approximately 20,000 miles serving business centres. The company was formerly known as Canadian Pacific Railway Limited and changed its name to Canadian Pacific Kansas City Limited in April 2023. Canadian Pacific Kansas City Limited was incorporated in 1881 and is headquartered in Calgary, Canada.