Ryder System (NYSE: R) and ArcBest Corporation (NASDAQ:ARCB) are both transportation companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, risk, valuation, dividends, institutional ownership, profitability and analyst recommendations.
Volatility and Risk
Ryder System has a beta of 1.39, indicating that its share price is 39% more volatile than the S&P 500. Comparatively, ArcBest Corporation has a beta of 1.62, indicating that its share price is 62% more volatile than the S&P 500.
This is a summary of recent ratings and target prices for Ryder System and ArcBest Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Ryder System presently has a consensus price target of $74.33, indicating a potential upside of 2.05%. ArcBest Corporation has a consensus price target of $25.50, indicating a potential downside of 3.23%. Given Ryder System’s higher probable upside, equities analysts plainly believe Ryder System is more favorable than ArcBest Corporation.
Ryder System pays an annual dividend of $1.76 per share and has a dividend yield of 2.4%. ArcBest Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Ryder System pays out 42.2% of its earnings in the form of a dividend. ArcBest Corporation pays out 37.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Ryder System has increased its dividend for 8 consecutive years. Ryder System is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Earnings and Valuation
This table compares Ryder System and ArcBest Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Ryder System||$6.99 billion||0.55||$1.82 billion||$4.17||17.47|
|ArcBest Corporation||$2.77 billion||0.24||$146.83 million||$0.86||30.64|
Ryder System has higher revenue and earnings than ArcBest Corporation. Ryder System is trading at a lower price-to-earnings ratio than ArcBest Corporation, indicating that it is currently the more affordable of the two stocks.
This table compares Ryder System and ArcBest Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
92.9% of Ryder System shares are owned by institutional investors. Comparatively, 86.4% of ArcBest Corporation shares are owned by institutional investors. 2.0% of Ryder System shares are owned by company insiders. Comparatively, 1.0% of ArcBest Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
Ryder System beats ArcBest Corporation on 11 of the 17 factors compared between the two stocks.
About Ryder System
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.
About ArcBest Corporation
ArcBest Corporation is a holding company of businesses providing integrated logistics solutions. The Company operates through three segments: Asset-Based, which consists of ABF Freight System, Inc. and other subsidiaries; ArcBest, which represents the consolidation of the operations of the Premium Logistics, Transportation Management and Household Goods Moving Services segments, and FleetNet, which includes the results of operations of FleetNet America, Inc. (FleetNet). Its Asset-Based operations offer transportation of general commodities through standard, time-critical, expedited and guaranteed LTL services-nationally and regionally. Its ArcBest segment includes truckload, expedite, international, warehousing, freight transportation, management services and moving services. Its FleetNet segment provides roadside assistance and maintenance management services for commercial vehicles to customers in the United States and Canada through a network of third-party service providers.
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