Norfolk Southern (NSC) versus Knight-Swift Transportation (SWFT) Critical Comparison

Norfolk Southern (NYSE: NSC) and Knight-Swift Transportation (NYSE:SWFT) are both mid-cap industrials companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Institutional & Insider Ownership

72.5% of Norfolk Southern shares are owned by institutional investors. Comparatively, 74.9% of Knight-Swift Transportation shares are owned by institutional investors. 0.4% of Norfolk Southern shares are owned by insiders. Comparatively, 44.9% of Knight-Swift Transportation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Norfolk Southern pays an annual dividend of $2.44 per share and has a dividend yield of 1.6%. Knight-Swift Transportation does not pay a dividend. Norfolk Southern pays out 38.8% of its earnings in the form of a dividend. Norfolk Southern has increased its dividend for 8 consecutive years.

Risk & Volatility

Norfolk Southern has a beta of 1.37, meaning that its share price is 37% more volatile than the S&P 500. Comparatively, Knight-Swift Transportation has a beta of 1.96, meaning that its share price is 96% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Norfolk Southern and Knight-Swift Transportation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Norfolk Southern 3 11 6 0 2.15
Knight-Swift Transportation 0 4 7 0 2.64

Norfolk Southern presently has a consensus target price of $131.05, indicating a potential downside of 15.09%. Knight-Swift Transportation has a consensus target price of $28.00, indicating a potential downside of 5.05%. Given Knight-Swift Transportation’s stronger consensus rating and higher possible upside, analysts plainly believe Knight-Swift Transportation is more favorable than Norfolk Southern.

Profitability

This table compares Norfolk Southern and Knight-Swift Transportation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Norfolk Southern 17.86% 14.72% 5.29%
Knight-Swift Transportation 0.81% 0.56% 0.33%

Valuation & Earnings

This table compares Norfolk Southern and Knight-Swift Transportation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Norfolk Southern $9.89 billion 4.47 $1.67 billion $6.29 24.54
Knight-Swift Transportation N/A N/A N/A $0.79 37.33

Norfolk Southern has higher revenue and earnings than Knight-Swift Transportation. Norfolk Southern is trading at a lower price-to-earnings ratio than Knight-Swift Transportation, indicating that it is currently the more affordable of the two stocks.

Summary

Knight-Swift Transportation beats Norfolk Southern on 8 of the 15 factors compared between the two stocks.

Norfolk Southern Company Profile

Norfolk Southern Corporation is a holding company engaged in the rail transportation business. As of December 31, 2016, the Company operated approximately 19,500 miles of road primarily in the East and Midwest. The Company is engaged in the rail transportation of raw materials, intermediate products and finished goods primarily in the Southeast, East and Midwest. The Company, through interchange with rail carriers, to and from the rest of the United States. The Company also transports overseas freight through various Atlantic and Gulf Coast ports. It provides logistics services and offers the intermodal network in the eastern half of the United States. The Company’s system reaches various manufacturing plants, electric generating facilities, mines, distribution centers and other businesses located in its service area. The Company’s intermodal market group consists of shipments moving in trailers, domestic and international containers, and RoadRailer equipment.

Knight-Swift Transportation 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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