Critical Analysis: Canadian National Railway (CNI) vs. Hub Group (HUBG)
Canadian National Railway (NYSE: CNI) and Hub Group (NASDAQ:HUBG) are both transportation companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.
Insider and Institutional Ownership
54.3% of Canadian National Railway shares are held by institutional investors. Comparatively, 90.4% of Hub Group shares are held by institutional investors. 2.4% of Canadian National Railway shares are held by company insiders. Comparatively, 5.4% of Hub Group shares are held by company 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 Hub Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Canadian National Railway||0||12||5||0||2.29|
Canadian National Railway currently has a consensus target price of $83.62, indicating a potential upside of 2.24%. Hub Group has a consensus target price of $44.38, indicating a potential upside of 11.36%. Given Hub Group’s higher possible upside, analysts plainly believe Hub Group is more favorable than Canadian National Railway.
Canadian National Railway pays an annual dividend of $1.32 per share and has a dividend yield of 1.6%. Hub Group does not pay a dividend. Canadian National Railway pays out 34.4% of its earnings in the form of a dividend. Canadian National Railway has raised its dividend for 5 consecutive years.
This table compares Canadian National Railway and Hub Group’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 1.13, indicating that its share price is 13% more volatile than the S&P 500. Comparatively, Hub Group has a beta of 1.41, indicating that its share price is 41% more volatile than the S&P 500.
Earnings and Valuation
This table compares Canadian National Railway and Hub Group’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Canadian National Railway||$10.50 billion||5.85||$5.65 billion||$3.84||21.30|
|Hub Group||$3.73 billion||0.36||$146.62 million||$1.69||23.58|
Canadian National Railway has higher revenue and earnings than Hub Group. Canadian National Railway is trading at a lower price-to-earnings ratio than Hub Group, indicating that it is currently the more affordable of the two stocks.
Canadian National Railway beats Hub Group on 11 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 Hub Group
Hub Group, Inc. is an asset-light freight transportation management company. The Company offers intermodal, truck brokerage and logistics services. It operates through two business segments: Mode and Hub. The Mode segment markets and operates its freight transportation services, consisting of intermodal, truck brokerage and logistics, primarily through agents entering into contractual arrangements with Mode Transportation, LLC (Mode LLC). The Mode segment also operates a temperature protected services division. The Hub segment provides intermodal, truck brokerage and logistics services through a network of operating centers throughout the United States, Canada and Mexico. The Hub segment services customers in a range of industries, including consumer products, retail and durable goods. It operates through a network of operating centers and independent business owners. The Company also provides drayage services with its own drayage operations.
Receive News & Ratings for Canadian National Railway Company Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Canadian National Railway Company and related companies with MarketBeat.com's FREE daily email newsletter.