Union Pacific Corporation (NYSE: UNP) and C.H. Robinson Worldwide (NASDAQ:CHRW) are both large-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, risk and analyst recommendations.
Risk and Volatility
Union Pacific Corporation has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, C.H. Robinson Worldwide has a beta of 0.42, meaning that its share price is 58% less volatile than the S&P 500.
Earnings and Valuation
This table compares Union Pacific Corporation and C.H. Robinson Worldwide’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Union Pacific Corporation||$20.72 billion||4.40||$9.80 billion||$5.52||20.64|
|C.H. Robinson Worldwide||$13.90 billion||0.77||$848.19 million||$3.40||22.51|
Union Pacific Corporation has higher revenue and earnings than C.H. Robinson Worldwide. Union Pacific Corporation is trading at a lower price-to-earnings ratio than C.H. Robinson Worldwide, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for Union Pacific Corporation and C.H. Robinson Worldwide, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Union Pacific Corporation||0||12||6||0||2.33|
|C.H. Robinson Worldwide||3||7||3||0||2.00|
Union Pacific Corporation currently has a consensus price target of $113.56, suggesting a potential downside of 0.34%. C.H. Robinson Worldwide has a consensus price target of $71.85, suggesting a potential downside of 6.11%. Given Union Pacific Corporation’s stronger consensus rating and higher possible upside, research analysts plainly believe Union Pacific Corporation is more favorable than C.H. Robinson Worldwide.
Union Pacific Corporation pays an annual dividend of $2.42 per share and has a dividend yield of 2.1%. C.H. Robinson Worldwide pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. Union Pacific Corporation pays out 43.8% of its earnings in the form of a dividend. C.H. Robinson Worldwide pays out 52.9% 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. Union Pacific Corporation has raised its dividend for 7 consecutive years and C.H. Robinson Worldwide has raised its dividend for 10 consecutive years. C.H. Robinson Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
78.4% of Union Pacific Corporation shares are held by institutional investors. Comparatively, 90.1% of C.H. Robinson Worldwide shares are held by institutional investors. 0.2% of Union Pacific Corporation shares are held by insiders. Comparatively, 0.9% of C.H. Robinson Worldwide shares are held by 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 table compares Union Pacific Corporation and C.H. Robinson Worldwide’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Union Pacific Corporation||21.79%||22.70%||8.05%|
|C.H. Robinson Worldwide||3.49%||37.41%||12.84%|
Union Pacific Corporation beats C.H. Robinson Worldwide on 10 of the 17 factors compared between the two stocks.
About Union Pacific Corporation
Union Pacific Corporation is a railroad operating company in the United States. The Company operates through its principal operating company, Union Pacific Railroad Company (UPRR). Its business mix includes Agricultural Products, Automotive, Chemicals, Coal, Industrial Products and Intermodal. Its freight traffic consists of bulk, manifest, and premium business. Bulk traffic primarily consists of coal, grain, soda ash, ethanol, rock and crude oil shipped in unit trains-trains transporting a single commodity from one origin to one destination. Manifest traffic includes individual carload or less than train-load business involving commodities, such as lumber, paper, food and chemicals. The transportation of finished vehicles, auto parts, intermodal containers and truck trailers are included as part of its premium business. As of December 31, 2016, its network included 32,070 route miles, linking Pacific Coast and Gulf Coast ports with the Midwest and Eastern United States gateways.
About C.H. Robinson Worldwide
C.H. Robinson Worldwide, Inc. is a provider of transportation services and logistics solutions through a network of offices operating in North America, Europe, Asia, Australia, New Zealand and South America. The Company’s segments include North American Surface Transportation (NAST), Global Forwarding, Robinson Fresh, and All Other and Corporate. The NAST segment provides freight transportation services across North America through a network of offices in the United States, Canada and Mexico. The primary services provided by Global Forwarding segment include ocean freight services, air freight services, and customs brokerage. The Robinson Fresh segment provides sourcing under the trade name Robinson Fresh. The All Other and Corporate segment primarily consists of Managed Services and Other Surface Transportation outside of North America. It develops global transportation and distribution networks to provide transportation and supply chain services throughout the world.
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