Head-To-Head Analysis: Covenant Transportation Group (CVTI) vs. YRC Worldwide (YRCW)

YRC Worldwide (NASDAQ: YRCW) and Covenant Transportation Group (NASDAQ:CVTI) are both small-cap transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, dividends, valuation, analyst recommendations, institutional ownership, risk and profitability.

Risk and Volatility

YRC Worldwide has a beta of 3.74, indicating that its share price is 274% more volatile than the S&P 500. Comparatively, Covenant Transportation Group has a beta of 1.65, indicating that its share price is 65% more volatile than the S&P 500.

Earnings & Valuation

This table compares YRC Worldwide and Covenant Transportation Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
YRC Worldwide $4.80 billion 0.09 $254.10 million ($0.02) -613.19
Covenant Transportation Group $678.55 million 0.53 $97.73 million $0.60 32.58

YRC Worldwide has higher revenue and earnings than Covenant Transportation Group. YRC Worldwide is trading at a lower price-to-earnings ratio than Covenant Transportation Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

85.1% of YRC Worldwide shares are held by institutional investors. Comparatively, 62.4% of Covenant Transportation Group shares are held by institutional investors. 3.7% of YRC Worldwide shares are held by insiders. Comparatively, 35.4% of Covenant Transportation Group shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations for YRC Worldwide and Covenant Transportation Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YRC Worldwide 0 2 3 0 2.60
Covenant Transportation Group 0 3 1 0 2.25

YRC Worldwide currently has a consensus price target of $16.33, suggesting a potential upside of 33.12%. Covenant Transportation Group has a consensus price target of $21.00, suggesting a potential upside of 7.42%. Given YRC Worldwide’s stronger consensus rating and higher possible upside, research analysts clearly believe YRC Worldwide is more favorable than Covenant Transportation Group.

Profitability

This table compares YRC Worldwide and Covenant Transportation Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YRC Worldwide N/A -0.70% 0.16%
Covenant Transportation Group 1.60% 4.65% 1.77%

Summary

YRC Worldwide beats Covenant Transportation Group on 8 of the 14 factors compared between the two stocks.

About YRC Worldwide

YRC Worldwide Inc. is a holding company. The Company, through its subsidiaries, offers its customers a range of transportation services. The Company operates through two segments: YRC Freight and Regional Transportation. The Company has less-than-truckload (LTL) networks in North America with local, regional, national and international capabilities. YRC Freight segment offers a range of services for the transportation of industrial, commercial and retail goods in national, regional and international markets, primarily through the operation of owned or leased equipment in its North American ground distribution network. It provides transportation services for various categories of goods, which include apparel, appliances, automotive parts, chemicals, food, furniture, glass, machinery, metal and metal products. YRC Worldwide Inc. brands include YRC, YRC Reimer, YRC Glen Moore, YRC Logistics, New Penn, Holland and Reddaway.

About Covenant Transportation Group

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.

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