Analyzing Hub Group (HUBG) & Echo Global Logistics (ECHO)

Hub Group (NASDAQ: HUBG) and Echo Global Logistics (NASDAQ:ECHO) are both small-cap transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Earnings and Valuation

This table compares Hub Group and Echo Global Logistics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hub Group $4.03 billion 0.40 $135.15 million $1.91 24.71
Echo Global Logistics $1.94 billion 0.40 $12.62 million $0.66 41.97

Hub Group has higher revenue and earnings than Echo Global Logistics. Hub Group is trading at a lower price-to-earnings ratio than Echo Global Logistics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Hub Group and Echo Global Logistics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hub Group 3.33% 9.48% 4.34%
Echo Global Logistics 0.96% 7.50% 3.16%

Institutional & Insider Ownership

95.1% of Hub Group shares are owned by institutional investors. Comparatively, 98.2% of Echo Global Logistics shares are owned by institutional investors. 5.8% of Hub Group shares are owned by insiders. Comparatively, 8.1% of Echo Global Logistics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Hub Group and Echo Global Logistics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hub Group 1 9 3 0 2.15
Echo Global Logistics 1 4 5 0 2.40

Hub Group presently has a consensus price target of $47.33, indicating a potential upside of 0.28%. Echo Global Logistics has a consensus price target of $32.33, indicating a potential upside of 16.73%. Given Echo Global Logistics’ stronger consensus rating and higher probable upside, analysts clearly believe Echo Global Logistics is more favorable than Hub Group.

Risk and Volatility

Hub Group has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Echo Global Logistics has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Summary

Echo Global Logistics beats Hub Group on 8 of the 14 factors compared between the two stocks.

About Hub Group

Hub Group, Inc., an asset-light freight transportation management company, provides intermodal, truck brokerage, and logistics services in North America. It operates through two segments, Mode and Hub. Its intermodal services include arranging for the movement of its customers' freight in containers and trailers over long distances. The company contracts with railroads to provide transportation for the long-haul portion of the shipment and with local trucking companies for pickup and delivery. Its intermodal services also comprise negotiating rail and drayage rates, electronically tracking shipments in transit, and consolidate billing and handling claims for freight loss or damage on behalf of customers. In addition, the company offers truck brokerage services, as well as a range of transportation management services and technology solutions, including shipment optimization, load consolidation, mode selection, carrier management, load planning and execution, and Web-based shipment visibility under the Unyson Logistics name. Further, it provides multi-modal transportation services, such as small parcel, heavyweight, expedited, less-than-truckload, truckload, intermodal, railcar, and international shipping. As of December 31, 2017, the company owned a total of 32,000 53-foot private containers, as well as access to approximately 2,500 rail-owned containers for use on the Union Pacific and the Norfolk Southern rails. Hub Group, Inc. was founded in 1971 and is headquartered in Oak Brook, Illinois.

About Echo Global Logistics

Echo Global Logistics, Inc. provides technology-enabled transportation and supply chain management solutions in the United States. It uses a proprietary technology platform to compile and analyze data from its multi-modal network of transportation providers for the transportation and logistics needs. The company offers services in various transportation modes, such as truckload, less-than truckload, small parcel, inter-modal, domestic air, and expedited and international. Its principal transportation management and logistics services include rate negotiation; procurement of transportation; shipment execution and tracking; carrier management, selection, reporting, and compliance; executive dashboard presentations and detailed shipment reports; freight bill payment and audit; claims processing and service refund management; design and management of inbound client freight programs; individually configured Web portals and self-service data warehouses; enterprise resource planning integration with transactional shipment data; and integration of shipping applications into client e-commerce sites, as well as back-end reports customized to the internal reporting needs of the business. The company serves clients operating in various industries, such as manufacturing, construction, food and beverage, consumer products, and retail. Echo Global Logistics, Inc. was founded in 2005 and is headquartered in Chicago, Illinois.

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