Ryder System (NYSE: R) and YRC Worldwide (NASDAQ:YRCW) are both transportation companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, profitability, institutional ownership, risk, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

89.5% of Ryder System shares are owned by institutional investors. Comparatively, 83.3% of YRC Worldwide shares are owned by institutional investors. 2.0% of Ryder System shares are owned by company insiders. Comparatively, 3.7% of YRC Worldwide shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Ryder System pays an annual dividend of $1.84 per share and has a dividend yield of 2.3%. YRC Worldwide does not pay a dividend. Ryder System pays out 44.1% of its earnings in the form of a dividend. YRC Worldwide has increased its dividend for 8 consecutive years.

Profitability

This table compares Ryder System and YRC Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ryder System 3.17% 11.71% 2.21%
YRC Worldwide 1.51% N/A 4.37%

Analyst Recommendations

This is a breakdown of current ratings for Ryder System and YRC Worldwide, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ryder System 0 5 2 0 2.29
YRC Worldwide 0 2 3 0 2.60

Ryder System presently has a consensus target price of $75.25, indicating a potential downside of 4.87%. YRC Worldwide has a consensus target price of $16.33, indicating a potential upside of 21.35%. Given YRC Worldwide’s stronger consensus rating and higher possible upside, analysts clearly believe YRC Worldwide is more favorable than Ryder System.

Risk and Volatility

Ryder System has a beta of 1.37, indicating that its share price is 37% more volatile than the S&P 500. Comparatively, YRC Worldwide has a beta of 3.77, indicating that its share price is 277% more volatile than the S&P 500.

Valuation & Earnings

This table compares Ryder System and YRC Worldwide’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Ryder System $6.99 billion 0.60 $1.82 billion $4.17 18.97
YRC Worldwide $4.80 billion 0.09 $254.10 million ($0.02) -672.66

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

Summary

YRC Worldwide beats Ryder System on 9 of the 17 factors compared between the two stocks.

Ryder System Company Profile

Ryder System, Inc. is engaged in offering transportation and supply chain management solutions. The Company operates through three segments: Fleet Management Solutions (FMS), which provides leasing, commercial rental, contract maintenance, and contract-related maintenance of trucks, tractors and trailers to customers principally in the United States, Canada and the United Kingdom; Dedicated Transportation Solutions (DTS), which provides vehicles and drivers as part of a dedicated transportation solution in the United States, and Supply Chain Solutions (SCS), which provides supply chain solutions, including distribution and transportation services in North America and Asia. Through its FMS business, the Company provides its customers with various fleet solutions. In addition, it provides its customers to purchase a selection of used trucks, tractors and trailers through its used vehicle sales program. Its customer base includes enterprises operating in various industries.

YRC Worldwide Company Profile

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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