Canadian Pacific Kansas City (NYSE:CP) & Full Truck Alliance (NYSE:YMM) Head to Head Review

Full Truck Alliance (NYSE:YMM) and Canadian Pacific Kansas City (NYSE:CP) are both industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Volatility and Risk

Full Truck Alliance has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500. Comparatively, Canadian Pacific Kansas City has a beta of 1.1, suggesting that its share price is 10% more volatile than the S&P 500.

Profitability

This table compares Full Truck Alliance and Canadian Pacific Kansas City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Full Truck Alliance	33.07%	10.68%	9.65%
Canadian Pacific Kansas City	25.02%	9.02%	4.86%

Dividends

Full Truck Alliance pays an annual dividend of $0.32 per share and has a dividend yield of 3.7%. Canadian Pacific Kansas City pays an annual dividend of $0.78 per share and has a dividend yield of 0.9%. Full Truck Alliance pays out 54.2% of its earnings in the form of a dividend. Canadian Pacific Kansas City pays out 25.1% 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.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Full Truck Alliance and Canadian Pacific Kansas City, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Full Truck Alliance	0	3	6	0	2.67
Canadian Pacific Kansas City	0	3	11	1	2.87

Full Truck Alliance presently has a consensus price target of $11.30, suggesting a potential upside of 32.19%. Canadian Pacific Kansas City has a consensus price target of $108.60, suggesting a potential upside of 19.03%. Given Full Truck Alliance’s higher possible upside, equities analysts clearly believe Full Truck Alliance is more favorable than Canadian Pacific Kansas City.

Valuation & Earnings

This table compares Full Truck Alliance and Canadian Pacific Kansas City”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Full Truck Alliance	$1.79 billion	4.99	$630.36 million	$0.59	14.48
Canadian Pacific Kansas City	$10.79 billion	7.43	$2.96 billion	$3.11	29.34

Canadian Pacific Kansas City has higher revenue and earnings than Full Truck Alliance. Full Truck Alliance is trading at a lower price-to-earnings ratio than Canadian Pacific Kansas City, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

39.0% of Full Truck Alliance shares are owned by institutional investors. Comparatively, 72.2% of Canadian Pacific Kansas City shares are owned by institutional investors. 16.5% of Full Truck Alliance shares are owned by insiders. Comparatively, 0.0% of Canadian Pacific Kansas City shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Canadian Pacific Kansas City beats Full Truck Alliance on 11 of the 17 factors compared between the two stocks.

About Full Truck Alliance

Full Truck Alliance Co. Ltd., together with its subsidiaries, operates a digital freight platform that connects shippers with truckers to facilitate shipments across distance ranges, cargo weights, and types in the People's Republic of China. The company offers freight matching services, such as freight listing and brokerage services; and online transaction services, as well as various value-added services, such as credit solutions, insurance brokerage, software solutions, electronic toll collection, and energy services. It also provides technology development and other services. The company was founded in 2011 and is based in Guiyang, China.

About Canadian Pacific Kansas City

Canadian Pacific Kansas City Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada, the United States, and Mexico. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; merchandise freight, such as forest products, energy, chemicals and plastics, metals, minerals, consumer products, and automotive; and intermodal traffic comprising retail goods in overseas containers. It also provides rail and intermodal transportation services over a network of approximately 20,000 miles serving business centres. The company was formerly known as Canadian Pacific Railway Limited and changed its name to Canadian Pacific Kansas City Limited in April 2023. Canadian Pacific Kansas City Limited was incorporated in 1881 and is headquartered in Calgary, Canada.