Head-To-Head Analysis: Greenbrier Companies (NYSE:GBX) & GATX (NYSE:GATX)

Greenbrier Companies (NYSE:GBX) and GATX (NYSE:GATX) are both transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Dividends

Greenbrier Companies pays an annual dividend of $1.28 per share and has a dividend yield of 2.5%. GATX pays an annual dividend of $2.44 per share and has a dividend yield of 1.6%. Greenbrier Companies pays out 18.1% of its earnings in the form of a dividend. GATX pays out 30.9% 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. Greenbrier Companies has raised its dividend for 3 consecutive years and GATX has raised its dividend for 15 consecutive years. Greenbrier Companies is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional & Insider Ownership

95.6% of Greenbrier Companies shares are held by institutional investors. Comparatively, 93.1% of GATX shares are held by institutional investors. 1.8% of Greenbrier Companies shares are held by insiders. Comparatively, 2.2% of GATX shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Greenbrier Companies and GATX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Greenbrier Companies	6.48%	14.56%	5.43%
GATX	17.73%	12.00%	2.35%

Analyst Ratings

This is a summary of current ratings and recommmendations for Greenbrier Companies and GATX, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Greenbrier Companies	1	0	1	0	2.00
GATX	0	2	1	0	2.33

Greenbrier Companies presently has a consensus price target of $59.50, indicating a potential upside of 18.48%. GATX has a consensus price target of $167.67, indicating a potential upside of 7.50%. Given Greenbrier Companies’ higher possible upside, equities research analysts clearly believe Greenbrier Companies is more favorable than GATX.

Risk and Volatility

Greenbrier Companies has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500. Comparatively, GATX has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Valuation and Earnings

This table compares Greenbrier Companies and GATX”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Greenbrier Companies	$3.54 billion	0.44	$160.10 million	$7.06	7.11
GATX	$1.59 billion	3.51	$284.20 million	$7.89	19.77

GATX has lower revenue, but higher earnings than Greenbrier Companies. Greenbrier Companies is trading at a lower price-to-earnings ratio than GATX, indicating that it is currently the more affordable of the two stocks.

About Greenbrier Companies

The Greenbrier Companies, Inc. designs, manufactures, and markets railroad freight car equipment in North America, Europe, and South America. It operates through three segments: Manufacturing; Maintenance Services; and Leasing & Management Services. The Manufacturing segment offers covered hopper cars, gondolas, open top hoppers, boxcars, center partition cars, tank cars, sustainable conversions, double-stack railcars, auto-max ii, multi-max, and multi-max plus products, intermodal cars, automobile transport, coil steel and metals, flat cars, sliding wall cars, pressurized tank cars, and non-pressurized tank cars. The Maintenance Services segment provides wheel services, including reconditioning of wheels and axles, new axle machining and finishing, and downsizing; operates a railcar repair, refurbishment, and maintenance network; and reconditions and manufactures railcar cushioning units, couplers, yokes, side frames, bolsters, and various other parts. The Leasing & Management Services segment offers operating leases and per diem leases for a fleet of approximately 13,400 railcars; and management services comprising railcar maintenance management, railcar accounting services, fleet management and logistics, administration, and railcar re-marketing. This segment provides management services for railroads, shippers, carriers, institutional investors, and other leasing and transportation companies. It serves railroads, leasing companies, financial institutions, shippers, carriers, and transportation companies. The company was founded in 1974 and is headquartered in Lake Oswego, Oregon.

About GATX

GATX Corporation, together its subsidiaries, operates as railcar leasing company in the United States, Canada, Mexico, Europe, and India. It operates through three segments: Rail North America, Rail International, and Portfolio Management. The company leases tank and freight railcars, and locomotives for petroleum, chemical, food/agriculture, and transportation industries. It also offers maintenance services, including the interior cleaning of railcars, routine maintenance and repair of car body and safety appliances, regulatory compliance works, wheelset replacements, interior blast and lining, exterior blast and painting, and car stenciling services. In addition, the company manufactures commercial aircraft jet engines and leases aircraft spare engines; and owns and manages tank containers that are leased to chemical, industrial gas, energy, food, cryogenic and pharmaceutical industries, and tank container operators, as well as provides tank container sourcing, remarketing, and inspection and maintenance services. As of December 31, 2023, it owned and operated a fleet of approximately 148,500 railcars; 493 four-axle and 30 six-axle locomotives; 399 aircraft spare engines; and 23,931 tank containers. GATX Corporation was founded in 1898 and is headquartered in Chicago, Illinois.