Celadon Group (NYSE: CGI) and Knight Transportation (NYSE:KNX) are both transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, profitabiliy, valuation, institutional ownership, analyst recommendations, risk and dividends.

Valuation and Earnings

This table compares Celadon Group and Knight Transportation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Celadon Group $1.05 billion 0.13 $83.46 million $0.20 24.75
Knight Transportation $1.11 billion 2.63 $239.44 million $0.96 37.81

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

Insider and Institutional Ownership

87.9% of Knight Transportation shares are held by institutional investors. 3.8% of Celadon Group shares are held by company insiders. Comparatively, 9.9% of Knight Transportation shares are held 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.

Dividends

Celadon Group pays an annual dividend of $0.08 per share and has a dividend yield of 1.6%. Knight Transportation pays an annual dividend of $0.24 per share and has a dividend yield of 0.7%. Celadon Group pays out 40.0% of its earnings in the form of a dividend. Knight Transportation pays out 25.0% 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.

Profitability

This table compares Celadon Group and Knight Transportation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Celadon Group 0.50% 1.41% 0.49%
Knight Transportation 7.03% 10.39% 7.61%

Analyst Recommendations

This is a summary of current recommendations and price targets for Celadon Group and Knight Transportation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Celadon Group 0 3 5 0 2.63
Knight Transportation 1 4 8 0 2.54

Celadon Group currently has a consensus price target of $20.72, indicating a potential upside of 318.52%. Knight Transportation has a consensus price target of $37.62, indicating a potential upside of 3.62%. Given Celadon Group’s stronger consensus rating and higher probable upside, equities analysts clearly believe Celadon Group is more favorable than Knight Transportation.

Risk and Volatility

Celadon Group has a beta of 1.72, indicating that its share price is 72% more volatile than the S&P 500. Comparatively, Knight Transportation has a beta of 0.86, indicating that its share price is 14% less volatile than the S&P 500.

Summary

Knight Transportation beats Celadon Group on 13 of the 17 factors compared between the two stocks.

Celadon Group Company Profile

Celadon Group, Inc. (Celadon) is a truckload freight transportation provider. The Company’s segments are asset-based, asset-light, and equipment leasing and services. Its services involve point-to-point shipping for its customers within the United States, between the United States and Mexico, and between the United States and Canada. The Company’s primary asset-based services include the United States domestic dry van, refrigerated and flatbed service; cross-border service between the United States and each of Mexico and Canada; intra-Mexico and intra-Canada service; contract service; regional and specialized short haul service, and rail intermodal service. The Company’s primary asset-light services include freight brokerage, warehousing, less-than truckload consolidation and supply chain logistics services. Celadon’s equipment leasing and services segment consists primarily of leasing activities with independent contractors and other trucking fleets.

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.

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