Canadian National Railway (NYSE: CNI) and C.H. Robinson Worldwide (NASDAQ:CHRW) are both mid-cap transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitabiliy, risk, earnings, valuation and institutional ownership.

Risk & Volatility

Canadian National Railway has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500. Comparatively, C.H. Robinson Worldwide has a beta of 0.45, suggesting that its share price is 55% less volatile than the S&P 500.

Institutional and Insider Ownership

55.3% of Canadian National Railway shares are owned by institutional investors. Comparatively, 87.1% of C.H. Robinson Worldwide shares are owned by institutional investors. 2.4% of Canadian National Railway shares are owned by insiders. Comparatively, 0.9% of C.H. Robinson Worldwide shares are owned 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.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Canadian National Railway and C.H. Robinson Worldwide, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Canadian National Railway 0 14 5 0 2.26
C.H. Robinson Worldwide 2 7 3 0 2.08

Canadian National Railway presently has a consensus price target of $81.36, indicating a potential downside of 0.76%. C.H. Robinson Worldwide has a consensus price target of $71.50, indicating a potential upside of 9.06%. Given C.H. Robinson Worldwide’s higher probable upside, analysts plainly believe C.H. Robinson Worldwide is more favorable than Canadian National Railway.

Valuation and Earnings

This table compares Canadian National Railway and C.H. Robinson Worldwide’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Canadian National Railway $9.63 billion 6.44 $5.21 billion $3.68 22.28
C.H. Robinson Worldwide $13.49 billion 0.68 $886.61 million $3.40 19.28

Canadian National Railway has higher revenue, but lower earnings than C.H. Robinson Worldwide. C.H. Robinson Worldwide is trading at a lower price-to-earnings ratio than Canadian National Railway, indicating that it is currently the more affordable of the two stocks.

Dividends

Canadian National Railway pays an annual dividend of $1.22 per share and has a dividend yield of 1.5%. C.H. Robinson Worldwide pays an annual dividend of $1.80 per share and has a dividend yield of 2.7%. Canadian National Railway pays out 33.2% of its earnings in the form of a dividend. C.H. Robinson Worldwide pays out 52.9% 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. Canadian National Railway has raised its dividend for 5 consecutive years and C.H. Robinson Worldwide has raised its dividend for 10 consecutive years. C.H. Robinson Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Canadian National Railway and C.H. Robinson Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Canadian National Railway 30.41% 24.55% 9.92%
C.H. Robinson Worldwide 3.49% 37.41% 12.84%

Summary

Canadian National Railway beats C.H. Robinson Worldwide on 10 of the 17 factors compared between the two stocks.

Canadian National Railway Company Profile

Canadian National Railway Company is engaged in the rail and related transportation business. The Company’s network of approximately 20,000 route miles of track spans Canada and mid-America, connecting approximately three coasts, including the Atlantic, the Pacific and the Gulf of Mexico and serving the cities and ports of Vancouver, Prince Rupert (British Columbia), Montreal, Halifax, New Orleans, and Mobile (Alabama), and the metropolitan areas of Toronto, Edmonton, Winnipeg, Calgary, Chicago, Memphis, Detroit, Duluth (Minnesota)/Superior (Wisconsin), and Jackson (Mississippi), with connections to all points in North America. Its network and connections to all Class I railroads provide its customers access to the three North American Free Trade Agreement nations. It carries over 300 million tons of cargo, serving exporters, importers, retailers, farmers and manufacturers. Its freight includes seven commodity representing a portfolio of goods.

C.H. Robinson Worldwide Company Profile

C.H. Robinson Worldwide, Inc. is a provider of transportation services and logistics solutions through a network of offices operating in North America, Europe, Asia, Australia, New Zealand and South America. The Company’s segments include North American Surface Transportation (NAST), Global Forwarding, Robinson Fresh, and All Other and Corporate. The NAST segment provides freight transportation services across North America through a network of offices in the United States, Canada and Mexico. The primary services provided by Global Forwarding segment include ocean freight services, air freight services, and customs brokerage. The Robinson Fresh segment provides sourcing under the trade name Robinson Fresh. The All Other and Corporate segment primarily consists of Managed Services and Other Surface Transportation outside of North America. It develops global transportation and distribution networks to provide transportation and supply chain services throughout the world.

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