Hub Group (NASDAQ: HUBG) and Canadian Pacific Railway Limited (NYSE:CP) are both transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitabiliy and institutional ownership.

Profitability

This table compares Hub Group and Canadian Pacific Railway Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hub Group 1.84% 11.09% 5.21%
Canadian Pacific Railway Limited 23.85% 32.15% 7.93%

Volatility and Risk

Hub Group has a beta of 1.41, meaning that its stock price is 41% more volatile than the S&P 500. Comparatively, Canadian Pacific Railway Limited has a beta of 1.1, meaning that its stock price is 10% more volatile than the S&P 500.

Dividends

Canadian Pacific Railway Limited pays an annual dividend of $1.67 per share and has a dividend yield of 1.0%. Hub Group does not pay a dividend. Canadian Pacific Railway Limited pays out 21.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Hub Group and Canadian Pacific Railway Limited, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hub Group 1 3 3 0 2.29
Canadian Pacific Railway Limited 0 4 17 0 2.81

Hub Group currently has a consensus price target of $41.80, indicating a potential upside of 6.09%. Canadian Pacific Railway Limited has a consensus price target of $185.13, indicating a potential upside of 11.22%. Given Canadian Pacific Railway Limited’s stronger consensus rating and higher possible upside, analysts plainly believe Canadian Pacific Railway Limited is more favorable than Hub Group.

Insider and Institutional Ownership

94.7% of Hub Group shares are held by institutional investors. Comparatively, 70.2% of Canadian Pacific Railway Limited shares are held by institutional investors. 5.4% of Hub Group shares are held by insiders. Comparatively, 0.0% of Canadian Pacific Railway Limited 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.

Earnings & Valuation

This table compares Hub Group and Canadian Pacific Railway Limited’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hub Group $3.66 billion 0.37 $159.76 million $2.01 19.60
Canadian Pacific Railway Limited $4.80 billion 5.09 $2.44 billion $7.64 21.79

Canadian Pacific Railway Limited has higher revenue and earnings than Hub Group. Hub Group is trading at a lower price-to-earnings ratio than Canadian Pacific Railway Limited, indicating that it is currently the more affordable of the two stocks.

Summary

Canadian Pacific Railway Limited beats Hub Group on 12 of the 16 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 Canadian Pacific Railway Limited

Canadian Pacific Railway Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada and the United States. The Company operates through rail transportation segment. The Company’s transports bulk commodities, merchandise freight, and intermodal traffic over a network of approximately 12,400 miles. Its railway feeds directly into the United States heartland from the east and west coasts. Its Bulk commodities include grain, coal, potash, fertilizers and sulfur. Its Merchandise freight consists of finished vehicles and machinery, as well as forest and industrial and consumer products. Its Intermodal traffic consists of retail goods in overseas containers that can be transported by train, ship and truck and in domestic containers and trailers that can be moved by train and truck. Its subsidiaries include Canadian Pacific Railway Company, Soo Line Railroad Company, Delaware and Hudson Railway Company, Inc. and Mount Stephen Properties Inc.

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