USA Truck (NASDAQ: USAK) and Landstar System (NASDAQ:LSTR) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, profitabiliy, risk, analyst recommendations, institutional ownership, dividends and earnings.

Earnings & Valuation

This table compares USA Truck and Landstar System’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
USA Truck $420.15 million 0.16 $22.29 million ($1.53) -5.44
Landstar System $3.33 billion 1.06 $270.67 million $3.46 24.26

Landstar System has higher revenue and earnings than USA Truck. USA Truck is trading at a lower price-to-earnings ratio than Landstar System, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares USA Truck and Landstar System’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USA Truck -2.94% -20.68% -4.09%
Landstar System 4.37% 26.11% 13.28%

Institutional & Insider Ownership

67.1% of USA Truck shares are owned by institutional investors. Comparatively, 97.1% of Landstar System shares are owned by institutional investors. 3.5% of USA Truck shares are owned by company insiders. Comparatively, 1.0% of Landstar System shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Landstar System pays an annual dividend of $0.36 per share and has a dividend yield of 0.4%. USA Truck does not pay a dividend. Landstar System pays out 10.4% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for USA Truck and Landstar System, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USA Truck 0 2 1 0 2.33
Landstar System 2 4 2 0 2.00

USA Truck presently has a consensus target price of $8.75, indicating a potential upside of 5.17%. Landstar System has a consensus target price of $82.67, indicating a potential downside of 1.50%. Given USA Truck’s stronger consensus rating and higher probable upside, research analysts plainly believe USA Truck is more favorable than Landstar System.

Risk and Volatility

USA Truck has a beta of 2.52, indicating that its share price is 152% more volatile than the S&P 500. Comparatively, Landstar System has a beta of 0.75, indicating that its share price is 25% less volatile than the S&P 500.

Summary

Landstar System beats USA Truck on 10 of the 15 factors compared between the two stocks.

About USA Truck

USA Truck, Inc. is a truckload carrier providing transportation of general commodities throughout the continental United States and into and out of portions of Mexico and Canada. The Company operates through two segments: Trucking and Strategic Capacity Solutions (SCS). The Trucking segment consists of truckload and dedicated freight services. The SCS segment consists of freight brokerage and rail intermodal services. The Company transports full dry van trailer loads of freight from origin to destination without intermediate stops or handling. The Company offers a range of truckload and logistics services to a customer base that spans a range of industries. The Company’s fleet of approximately 1,832 tractors consists of 1,568 company tractors and 264 independent contractor tractors. The Company owns approximately 6,200 trailers. The Company also transports general commodities into and out of Mexico by allowing through-trailer service from its terminal in Laredo, Texas.

About Landstar System

Landstar System, Inc. (Landstar) is an asset-light provider of integrated transportation management solutions. The Company offers services to its customers across multiple transportation modes, with the ability to arrange for individual shipments of freight to enterprise solutions to manage customer’s transportation needs. It operates in two segments: the Transportation Logistics segment and the Insurance segment. The Transportation Logistics segment provides a range of integrated transportation management solutions. Transportation services offered by it include truckload and less-than-truckload transportation, rail intermodal, air cargo, ocean cargo, expedited ground and air delivery of time-critical freight, heavy-haul or specialized, the United States-Canada and the United States-Mexico cross-border, project cargo and customs brokerage. The insurance segment consists of Signature Insurance Company, which is an offshore insurance subsidiary, and Risk Management Claim Services, Inc.

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