Critical Survey: YRC Worldwide (NASDAQ:YRCW) & Genesee & Wyoming (GWR)

Genesee & Wyoming (NYSE: GWR) and YRC Worldwide (NASDAQ:YRCW) are both transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, valuation, profitability and risk.

Earnings and Valuation

This table compares Genesee & Wyoming and YRC Worldwide’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genesee & Wyoming $2.00 billion 2.59 $141.13 million $2.11 39.40
YRC Worldwide $4.70 billion 0.11 $21.50 million ($0.35) -44.43

Genesee & Wyoming has higher earnings, but lower revenue than YRC Worldwide. YRC Worldwide is trading at a lower price-to-earnings ratio than Genesee & Wyoming, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Genesee & Wyoming has a beta of 1.81, suggesting that its stock price is 81% more volatile than the S&P 500. Comparatively, YRC Worldwide has a beta of 3.73, suggesting that its stock price is 273% more volatile than the S&P 500.

Profitability

This table compares Genesee & Wyoming and YRC Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genesee & Wyoming 6.10% 5.80% 2.45%
YRC Worldwide -0.22% -0.70% -0.22%

Analyst Recommendations

This is a breakdown of current recommendations for Genesee & Wyoming and YRC Worldwide, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesee & Wyoming 0 4 4 0 2.50
YRC Worldwide 0 1 3 0 2.75

Genesee & Wyoming presently has a consensus price target of $81.25, suggesting a potential downside of 2.26%. YRC Worldwide has a consensus price target of $17.00, suggesting a potential upside of 9.32%. Given YRC Worldwide’s stronger consensus rating and higher possible upside, analysts clearly believe YRC Worldwide is more favorable than Genesee & Wyoming.

Insider & Institutional Ownership

96.2% of Genesee & Wyoming shares are held by institutional investors. Comparatively, 85.4% of YRC Worldwide shares are held by institutional investors. 3.5% of Genesee & Wyoming shares are held by company insiders. Comparatively, 3.7% of YRC Worldwide shares are held by company 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.

Summary

Genesee & Wyoming beats YRC Worldwide on 9 of the 14 factors compared between the two stocks.

About Genesee & Wyoming

Genesee & Wyoming Inc. owns and operates freight railroads across the world. As of December 31, 2016, the Company owned or leased 122 freight railroads worldwide that are organized in 10 operating regions. The Company operates through three segments, which include North American Operations, Australian Operations and U.K./European Operations. In North America, the Company has operations in eight regions, such as Central, Coastal (which includes industrial switching and port operations), Midwest, Mountain West (which includes industrial switching operations), Northeast, Pacific, Southern and Canada. Outside the United States, the Company has operations in two regions: Australia and the United Kingdom/Europe (which consists of operations in the United Kingdom, Belgium, Germany, the Netherlands and Poland, as well as the provision of management and technical support through Freightliner to Saudi Arabia Railway Company).

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. The Company’s Regional Transportation segment consists of USF Holland LLC (Holland), New Penn Motor Express, LLC (New Penn) and USF Reddaway Inc. (Reddaway).

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