Financial Contrast: Canadian National Railway (CNI) & YRC Worldwide (YRCW)
Canadian National Railway (NYSE: CNI) and YRC Worldwide (NASDAQ:YRCW) are both transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.
Institutional and Insider Ownership
55.6% of Canadian National Railway shares are held by institutional investors. Comparatively, 87.5% of YRC Worldwide shares are held by institutional investors. 2.4% of Canadian National Railway shares are held by insiders. Comparatively, 3.7% of YRC Worldwide shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
This is a breakdown of recent ratings and recommmendations for Canadian National Railway and YRC Worldwide, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Canadian National Railway||0||13||5||0||2.28|
Canadian National Railway currently has a consensus price target of $81.36, suggesting a potential upside of 2.34%. YRC Worldwide has a consensus price target of $16.33, suggesting a potential upside of 38.42%. Given YRC Worldwide’s stronger consensus rating and higher possible upside, analysts plainly believe YRC Worldwide is more favorable than Canadian National Railway.
Canadian National Railway pays an annual dividend of $1.22 per share and has a dividend yield of 1.5%. YRC Worldwide does not pay a dividend. Canadian National Railway pays out 31.8% of its earnings in the form of a dividend. Canadian National Railway has raised its dividend for 5 consecutive years.
Earnings and Valuation
This table compares Canadian National Railway and YRC Worldwide’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Canadian National Railway||$10.17 billion||5.87||$5.48 billion||$3.84||20.70|
|YRC Worldwide||$4.80 billion||0.08||$254.10 million||($0.02)||-589.71|
Canadian National Railway has higher revenue and earnings than YRC Worldwide. YRC 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.
This table compares Canadian National Railway and YRC Worldwide’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Canadian National Railway||30.59%||25.42%||10.24%|
Risk and Volatility
Canadian National Railway has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, YRC Worldwide has a beta of 3.74, meaning that its share price is 274% more volatile than the S&P 500.
Canadian National Railway beats YRC Worldwide on 10 of the 17 factors compared between the two stocks.
About Canadian National Railway
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.
About YRC Worldwide
YRC Worldwide Inc. is a holding company. The Company, through its subsidiaries, offers its customers a range of transportation services. The Company operates through two segments: YRC Freight and Regional Transportation. The Company has less-than-truckload (LTL) networks in North America with local, regional, national and international capabilities. YRC Freight segment offers a range of services for the transportation of industrial, commercial and retail goods in national, regional and international markets, primarily through the operation of owned or leased equipment in its North American ground distribution network. It provides transportation services for various categories of goods, which include apparel, appliances, automotive parts, chemicals, food, furniture, glass, machinery, metal and metal products. The Company’s Regional Transportation segment consists of USF Holland LLC (Holland), New Penn Motor Express, LLC (New Penn) and USF Reddaway Inc. (Reddaway).
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