Freightcar America (NASDAQ: RAIL) and Greenbrier Companies, Inc. (The) (NYSE:GBX) are both small-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitabiliy, valuation and dividends.

Dividends

Freightcar America pays an annual dividend of $0.36 per share and has a dividend yield of 2.1%. Greenbrier Companies, Inc. (The) pays an annual dividend of $0.88 per share and has a dividend yield of 2.0%. Freightcar America pays out 1,800.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Greenbrier Companies, Inc. (The) pays out 22.2% of its earnings in the form of a dividend.

Institutional and Insider Ownership

77.3% of Freightcar America shares are held by institutional investors. 4.1% of Freightcar America shares are held by company insiders. Comparatively, 4.6% of Greenbrier Companies, Inc. (The) shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Freightcar America and Greenbrier Companies, Inc. (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Freightcar America 0.06% 1.60% 1.17%
Greenbrier Companies, Inc. (The) 5.85% 11.74% 6.31%

Analyst Recommendations

This is a summary of current ratings and target prices for Freightcar America and Greenbrier Companies, Inc. (The), as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Freightcar America 0 3 0 0 2.00
Greenbrier Companies, Inc. (The) 2 3 4 0 2.22

Freightcar America currently has a consensus target price of $15.00, suggesting a potential downside of 10.66%. Greenbrier Companies, Inc. (The) has a consensus target price of $47.14, suggesting a potential upside of 5.47%. Given Greenbrier Companies, Inc. (The)’s stronger consensus rating and higher probable upside, analysts plainly believe Greenbrier Companies, Inc. (The) is more favorable than Freightcar America.

Risk & Volatility

Freightcar America has a beta of 1.6, meaning that its share price is 60% more volatile than the S&P 500. Comparatively, Greenbrier Companies, Inc. (The) has a beta of 1.87, meaning that its share price is 87% more volatile than the S&P 500.

Earnings and Valuation

This table compares Freightcar America and Greenbrier Companies, Inc. (The)’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Freightcar America $514.68 million 0.41 $10.85 million $0.02 839.50
Greenbrier Companies, Inc. (The) $2.15 billion 0.59 $345.21 million $3.97 11.26

Greenbrier Companies, Inc. (The) has higher revenue and earnings than Freightcar America. Greenbrier Companies, Inc. (The) is trading at a lower price-to-earnings ratio than Freightcar America, indicating that it is currently the more affordable of the two stocks.

Summary

Greenbrier Companies, Inc. (The) beats Freightcar America on 13 of the 16 factors compared between the two stocks.

About Freightcar America

FreightCar America, Inc. is a manufacturer of railcars and railcar components. The Company operates in the Manufacturing segment. The Company designs and manufactures a range of railcar types for transportation of bulk commodities and containerized freight products primarily in North America, including open top hoppers, covered hoppers, and gondolas along with intermodal and non-intermodal flat cars. The Company manufactures aluminum-bodied railcars, including coal cars. The Manufacturing segment includes new railcar manufacturing, used railcar sales, railcar leasing and major railcar rebuilds. The Company refurbishes and rebuilds railcars, and sells forged, cast and fabricated parts for all of the railcars. The Company also leases freight cars through its JAIX Leasing Company subsidiary. The Company’s railcar manufacturing facilities are located in Cherokee, Alabama (Shoals), Danville, Illinois and Roanoke, Virginia.

About Greenbrier Companies, Inc. (The)

The Greenbrier Companies, Inc. is a designer, manufacturer and marketer of railroad freight car equipment in North America and Europe; a manufacturer and marketer of marine barges in North America; a provider of wheel services, parts, leasing and other services to the railroad and related transportation industries in North America, and a provider of railcar repair, refurbishment and retrofitting services in North America through a joint venture partnership. It operates in four segments: Manufacturing; Wheels & Parts; Leasing & Services, and GBW Joint Venture. It also produces rail castings and tank heads through unconsolidated joint ventures. It operates an integrated business model in North America that combines freight car manufacturing, wheel services, repair, refurbishment, retrofitting, component parts, leasing and fleet management services. Its customers include railroads, leasing companies, financial institutions, shippers, carriers and transportation companies.

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