Knight Transportation (NYSE: KNX) and Heartland Express (NASDAQ:HTLD) are both transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.

Dividends

Knight Transportation pays an annual dividend of $0.24 per share and has a dividend yield of 0.6%. Heartland Express pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Knight Transportation pays out 25.0% of its earnings in the form of a dividend. Heartland Express pays out 12.1% 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. Knight Transportation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Knight Transportation and Heartland Express’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Knight Transportation 7.03% 10.39% 7.61%
Heartland Express 9.89% 10.60% 7.28%

Analyst Ratings

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knight Transportation 1 4 9 0 2.57
Heartland Express 2 4 0 0 1.67

Knight Transportation currently has a consensus target price of $38.00, indicating a potential downside of 6.98%. Heartland Express has a consensus target price of $19.33, indicating a potential downside of 15.46%. Given Knight Transportation’s stronger consensus rating and higher possible upside, analysts clearly believe Knight Transportation is more favorable than Heartland Express.

Insider and Institutional Ownership

88.5% of Knight Transportation shares are held by institutional investors. Comparatively, 60.9% of Heartland Express shares are held by institutional investors. 9.9% of Knight Transportation shares are held by company insiders. Comparatively, 42.1% of Heartland Express shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Knight Transportation and Heartland Express’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Knight Transportation $1.11 billion 2.97 $243.34 million $0.96 42.55
Heartland Express $548.88 million 3.47 $165.30 million $0.66 34.65

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

Risk & Volatility

Knight Transportation has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Heartland Express has a beta of 0.53, indicating that its share price is 47% less volatile than the S&P 500.

Summary

Knight Transportation beats Heartland Express on 12 of the 17 factors compared between the two stocks.

About Knight Transportation

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.

About Heartland Express

Heartland Express, Inc. is a holding company. The Company is a short-to-medium haul truckload carrier. The Company focuses primarily on short- to medium-haul, asset-based dry van truckload services in regional markets near its terminals. The Company’s truckload services are primarily asset-based transportation services in the dry van truckload market, and it also offers truckload temperature-controlled transportation services and non-asset based brokerage services. All tractors are equipped with mobile communication systems. Its primary customers include retailers and manufacturers. It provides nationwide asset-based dry van truckload service for shippers from Washington to Florida and New England to California. The Company provides truckload services across the United States and parts of Canada. As of December 31, 2016, it had operated 20 terminal facilities throughout the contiguous United States in addition to its terminal and corporate headquarters in North Liberty, Iowa.

Receive News & Ratings for Knight Transportation Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Knight Transportation Inc. and related companies with MarketBeat.com's FREE daily email newsletter.