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

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

Institutional and Insider Ownership

74.9% of Knight-Swift Transportation shares are owned by institutional investors. Comparatively, 72.9% of Norfolk Southern shares are owned by institutional investors. 44.9% of Knight-Swift Transportation shares are owned by insiders. Comparatively, 0.4% of Norfolk Southern shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Knight-Swift Transportation and Norfolk Southern’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Knight-Swift Transportation N/A N/A N/A $0.79 37.33
Norfolk Southern $10.55 billion 3.73 $5.40 billion $6.61 20.97

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.

Profitability

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

Net Margins Return on Equity Return on Assets
Knight-Swift Transportation 0.81% 0.56% 0.33%
Norfolk Southern 51.22% 14.16% 5.46%

Risk and Volatility

Knight-Swift Transportation has a beta of 1.96, indicating that its stock price is 96% more volatile than the S&P 500. Comparatively, Norfolk Southern has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.

Dividends

Norfolk Southern pays an annual dividend of $2.88 per share and has a dividend yield of 2.1%. Knight-Swift Transportation does not pay a dividend. Norfolk Southern pays out 43.6% of its earnings in the form of a dividend. Knight-Swift Transportation has increased its dividend for 8 consecutive years.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Knight-Swift Transportation 0 5 6 0 2.55
Norfolk Southern 2 12 6 0 2.20

Knight-Swift Transportation presently has a consensus target price of $28.00, indicating a potential downside of 5.05%. Norfolk Southern has a consensus target price of $138.72, indicating a potential upside of 0.08%. Given Norfolk Southern’s higher possible upside, analysts clearly believe Norfolk Southern is more favorable than Knight-Swift Transportation.

About Knight-Swift Transportation

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.

About Norfolk Southern

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.

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