Genesee & Wyoming (NYSE: GWR) and Kansas City Southern (NYSE:KSU) are both mid-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.
This table compares Genesee & Wyoming and Kansas City Southern’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Genesee & Wyoming||6.10%||5.80%||2.45%|
|Kansas City Southern||37.24%||12.34%||6.10%|
Kansas City Southern pays an annual dividend of $1.44 per share and has a dividend yield of 1.3%. Genesee & Wyoming does not pay a dividend. Kansas City Southern pays out 15.6% of its earnings in the form of a dividend. Genesee & Wyoming has increased its dividend for 4 consecutive years.
This is a summary of recent ratings and recommmendations for Genesee & Wyoming and Kansas City Southern, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Genesee & Wyoming||0||4||4||0||2.50|
|Kansas City Southern||0||7||8||0||2.53|
Genesee & Wyoming currently has a consensus price target of $81.25, indicating a potential downside of 0.40%. Kansas City Southern has a consensus price target of $112.86, indicating a potential upside of 1.71%. Given Kansas City Southern’s stronger consensus rating and higher probable upside, analysts clearly believe Kansas City Southern is more favorable than Genesee & Wyoming.
Risk & Volatility
Genesee & Wyoming has a beta of 1.81, meaning that its share price is 81% more volatile than the S&P 500. Comparatively, Kansas City Southern has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500.
Insider and Institutional Ownership
96.3% of Genesee & Wyoming shares are owned by institutional investors. Comparatively, 84.1% of Kansas City Southern shares are owned by institutional investors. 3.5% of Genesee & Wyoming shares are owned by company insiders. Comparatively, 1.0% of Kansas City Southern shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares Genesee & Wyoming and Kansas City Southern’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Genesee & Wyoming||$2.00 billion||2.54||$141.13 million||$2.11||38.66|
|Kansas City Southern||$2.58 billion||4.45||$962.00 million||$9.22||12.03|
Kansas City Southern has higher revenue and earnings than Genesee & Wyoming. Kansas City Southern is trading at a lower price-to-earnings ratio than Genesee & Wyoming, indicating that it is currently the more affordable of the two stocks.
Kansas City Southern beats Genesee & Wyoming on 11 of the 17 factors compared between the two stocks.
Genesee & Wyoming Company Profile
Genesee & Wyoming Inc. owns and operates freight railroads across the world. As of December 31, 2016, the Company owned or leased 122 freight railroads worldwide that are organized in 10 operating regions. The Company operates through three segments, which include North American Operations, Australian Operations and U.K./European Operations. In North America, the Company has operations in eight regions, such as Central, Coastal (which includes industrial switching and port operations), Midwest, Mountain West (which includes industrial switching operations), Northeast, Pacific, Southern and Canada. Outside the United States, the Company has operations in two regions: Australia and the United Kingdom/Europe (which consists of operations in the United Kingdom, Belgium, Germany, the Netherlands and Poland, as well as the provision of management and technical support through Freightliner to Saudi Arabia Railway Company).
Kansas City Southern Company Profile
Kansas City Southern (KCS) is a holding company. The Company has domestic and international rail operations in North America that are focused on the north/south freight corridor connecting commercial and industrial markets in the central United States with industrial cities in Mexico. The Company’s subsidiaries include The Kansas City Southern Railway Company (KCSR) and Kansas City Southern de Mexico, S.A. de C.V. (KCSM). KCSR serves a 10-state region in the midwest and southeast regions of the United States and has the north/south rail route between Kansas City, Missouri and various ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi and Texas. KCSM operates a corridor of the Mexican railroad system. KCSM’s rail lines provide rail access to the United States and Mexico border crossing at Nuevo Laredo, Tamaulipas. KCSM also provides rail access to the Port of Lazaro Cardenas on the Pacific Ocean.
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