Covenant Transportation Group (CVTI) & Knight-Swift Transportation Holdings (NYSE:SWFT) Financial Survey

Covenant Transportation Group (NASDAQ: CVTI) and Knight-Swift Transportation Holdings (NYSE:SWFT) are both transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Covenant Transportation Group and Knight-Swift Transportation Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covenant Transportation Group 0 3 1 0 2.25
Knight-Swift Transportation Holdings 0 5 9 0 2.64

Covenant Transportation Group currently has a consensus price target of $23.50, suggesting a potential downside of 18.20%. Knight-Swift Transportation Holdings has a consensus price target of $28.45, suggesting a potential downside of 3.51%. Given Knight-Swift Transportation Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Knight-Swift Transportation Holdings is more favorable than Covenant Transportation Group.

Insider and Institutional Ownership

62.1% of Covenant Transportation Group shares are owned by institutional investors. Comparatively, 74.9% of Knight-Swift Transportation Holdings shares are owned by institutional investors. 35.2% of Covenant Transportation Group shares are owned by insiders. Comparatively, 44.9% of Knight-Swift Transportation Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Covenant Transportation Group and Knight-Swift Transportation Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Covenant Transportation Group $678.55 million 0.77 $97.66 million $0.69 41.64
Knight-Swift Transportation Holdings $4.01 billion 0.98 $480.95 million $0.90 32.77

Knight-Swift Transportation Holdings has higher revenue and earnings than Covenant Transportation Group. Knight-Swift Transportation Holdings 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.

Risk and Volatility

Covenant Transportation Group has a beta of 1.68, suggesting that its stock price is 68% more volatile than the S&P 500. Comparatively, Knight-Swift Transportation Holdings has a beta of 1.96, suggesting that its stock price is 96% more volatile than the S&P 500.

Profitability

This table compares Covenant Transportation Group and Knight-Swift Transportation Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Covenant Transportation Group 1.82% 5.35% 2.05%
Knight-Swift Transportation Holdings 2.65% 15.10% 4.04%

Summary

Knight-Swift Transportation Holdings beats Covenant Transportation Group on 13 of the 14 factors compared between the two stocks.

Covenant Transportation Group Company Profile

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.

Knight-Swift Transportation Holdings Company Profile

Knight-Swift Transportation Holdings Inc., formerly Swift Transportation Company, provides truckload services in North America. The Company also provides rail intermodal and non-asset based freight brokerage and logistics management services. The Company provides its services across United States, Mexico and Canada using its dry van, refrigerated, flatbed and specialized trailers, and intermodal containers. As of September 10, 2017, the Company had a fleet of approximately 23,000 tractors and 77,000 trailers. It operates through its Knight Transportation, Swift Transportation, and Barr-Nunn branded subsidiaries.

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