Knight Transportation (NYSE: KNX) and J.B. Hunt Transport Services (NASDAQ:JBHT) are both mid-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, profitabiliy, analyst recommendations, risk, valuation and dividends.

Institutional & Insider Ownership

88.4% of Knight Transportation shares are owned by institutional investors. Comparatively, 72.7% of J.B. Hunt Transport Services shares are owned by institutional investors. 9.9% of Knight Transportation shares are owned by company insiders. Comparatively, 4.3% of J.B. Hunt Transport Services shares are owned by company 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.

Profitability

This table compares Knight Transportation and J.B. Hunt Transport Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knight Transportation 7.61% 11.16% 8.01%
J.B. Hunt Transport Services 6.32% 30.09% 11.08%

Valuation and Earnings

This table compares Knight Transportation and J.B. Hunt Transport Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Knight Transportation $1.12 billion 2.50 $246.59 million $1.05 33.19
J.B. Hunt Transport Services $6.77 billion 1.49 $1.06 billion $3.82 24.01

J.B. Hunt Transport Services has higher revenue and earnings than Knight Transportation. J.B. Hunt Transport Services is trading at a lower price-to-earnings ratio than Knight Transportation, indicating that it is currently the more affordable of the two stocks.

Dividends

Knight Transportation pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. J.B. Hunt Transport Services pays an annual dividend of $0.92 per share and has a dividend yield of 1.0%. Knight Transportation pays out 22.9% of its earnings in the form of a dividend. J.B. Hunt Transport Services pays out 24.1% 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. Knight Transportation has raised its dividend for 3 consecutive years and J.B. Hunt Transport Services has raised its dividend for 13 consecutive years. J.B. Hunt Transport Services is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Knight Transportation has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, J.B. Hunt Transport Services has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations for Knight Transportation and J.B. Hunt Transport Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knight Transportation 1 5 8 0 2.50
J.B. Hunt Transport Services 0 7 9 0 2.56

Knight Transportation currently has a consensus target price of $36.43, indicating a potential upside of 4.53%. J.B. Hunt Transport Services has a consensus target price of $97.81, indicating a potential upside of 6.67%. Given J.B. Hunt Transport Services’ stronger consensus rating and higher possible upside, analysts clearly believe J.B. Hunt Transport Services is more favorable than Knight Transportation.

Summary

J.B. Hunt Transport Services beats Knight Transportation on 11 of the 17 factors compared between the two stocks.

Knight Transportation Company Profile

Knight Transportation, Inc. is a provider of multiple truckload transportation and logistics services, which involve the movement of trailer or container loads of freight from origin to destination for a single customer. The Company operates through two segments: Trucking and Logistics. Its Trucking segment consists of three operating units: dry van truckload, temperature-controlled truckload and drayage services. The Trucking segment provides truckload transportation, including services of various products, goods and materials. Its Logistics segment consists of two operating units: freight brokerage services and rail intermodal. It provides logistics, freight management and other non-trucking services to its customers, through its Logistics segment. It provides a range of truckload and logistics services through its nationwide network of service centers, truckload tractor fleets and its contractual access to third-party capacity providers. It operates primarily in the United States.

J.B. Hunt Transport Services Company Profile

J.B. Hunt Transport Services, Inc. is a surface transportation, delivery, and logistics company in North America. The Company segments include Intermodal (JBI), Dedicated Contract Services (DCS), Integrated Capacity Solutions (ICS) and Truck (JBT). The Company, through its subsidiaries, provides transportation and delivery services to a range of customers and consumers throughout the continental United States, Canada and Mexico. The JBI segment draws on the intermodal services of rail carriers for the underlying linehaul movement of its equipment between rail ramps. Its DCS segment focuses on private fleet conversion and creation in replenishment, specialized equipment and final-mile delivery services. Its ICS segment provides traditional freight brokerage and transportation logistics solutions to customers through relationships with third-party carriers and integration. Its JBT segment offers full-load, dry-van freight, utilizing tractors operating over roads and highways.

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