Analyzing Covenant Transportation Group (CVTI) & XPO Logistics (XPO)
Covenant Transportation Group (NASDAQ: CVTI) and XPO Logistics (NYSE:XPO) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.
This table compares Covenant Transportation Group and XPO Logistics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Covenant Transportation Group||1.60%||4.65%||1.77%|
Valuation and Earnings
This table compares Covenant Transportation Group and XPO Logistics’ top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Covenant Transportation Group||$678.55 million||0.71||$97.66 million||$0.60||43.60|
|XPO Logistics||$14.69 billion||0.51||$1.20 billion||$0.87||73.67|
XPO Logistics has higher revenue and earnings than Covenant Transportation Group. Covenant Transportation Group is trading at a lower price-to-earnings ratio than XPO Logistics, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
62.1% of Covenant Transportation Group shares are held by institutional investors. Comparatively, 89.5% of XPO Logistics shares are held by institutional investors. 35.2% of Covenant Transportation Group shares are held by company insiders. Comparatively, 16.9% of XPO Logistics shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk & Volatility
Covenant Transportation Group has a beta of 1.61, indicating that its share price is 61% more volatile than the S&P 500. Comparatively, XPO Logistics has a beta of 2.28, indicating that its share price is 128% more volatile than the S&P 500.
This is a summary of recent ratings and price targets for Covenant Transportation Group and XPO Logistics, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Covenant Transportation Group||0||2||2||0||2.50|
Covenant Transportation Group presently has a consensus target price of $23.00, suggesting a potential downside of 12.08%. XPO Logistics has a consensus target price of $67.00, suggesting a potential upside of 4.54%. Given XPO Logistics’ stronger consensus rating and higher possible upside, analysts clearly believe XPO Logistics is more favorable than Covenant Transportation Group.
XPO Logistics beats Covenant Transportation Group on 9 of the 14 factors compared between the two stocks.
Covenant Transportation Group Company Profile
Covenant Transportation Group, Inc. is a provider of expedited long haul freight transportation, primarily using two-person driver teams in transcontinental lanes. The Company’s services also include refrigerated, dedicated, cross-border, regional and brokerage. The Company’s segments include Truckload and Other. The Truckload segment includes the operations of Covenant Transport, Inc. (Covenant Transport), its flagship operation, which provides expedited long haul, dedicated, temperature-controlled and regional solo-driver service; Southern Refrigerated Transport, Inc. (SRT), which provides primarily long haul, regional, dedicated and intermodal temperature-controlled service, and Star Transportation, Inc. (Star), which provides regional solo-driver and dedicated services, primarily in the southeastern United States. The Company provides truckload transportation services throughout the continental United States, into and out of Mexico, and into and out of portions of Canada.
XPO Logistics Company Profile
XPO Logistics, Inc. is a global provider of supply chain solutions. The Company operates in two segments: Transportation and Logistics. The Transportation segment provides freight brokerage, last mile, less-than-truckload (LTL), full truckload and global forwarding services. The Logistics segment provides a range of contract logistics services, including highly engineered and customized solutions, value-added warehousing and distribution, cold chain solutions and other inventory solutions. Its freight brokerage operations encompass truck brokerage globally, as well as intermodal, drayage and expedite services in North America. In Logistics segment, it provides warehousing and distribution solutions, such as factory support, aftermarket support, integrated manufacturing, packaging, labeling and transportation. As of December 31, 2016, the Company had more than 10,000 independent owner operators under contract to provide drayage, expedite, last mile and LTL services to its customers.
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