ArcBest Corporation (NASDAQ: ARCB) and Norfolk Souther Corporation (NYSE:NSC) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, analyst recommendations, risk, profitability and valuation.
This table compares ArcBest Corporation and Norfolk Souther Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Norfolk Souther Corporation||17.66%||14.45%||5.18%|
Risk and Volatility
ArcBest Corporation has a beta of 1.7, meaning that its stock price is 70% more volatile than the S&P 500. Comparatively, Norfolk Souther Corporation has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500.
Institutional & Insider Ownership
85.8% of ArcBest Corporation shares are owned by institutional investors. Comparatively, 70.6% of Norfolk Souther Corporation shares are owned by institutional investors. 1.0% of ArcBest Corporation shares are owned by insiders. Comparatively, 0.4% of Norfolk Souther Corporation shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Valuation and Earnings
This table compares ArcBest Corporation and Norfolk Souther Corporation’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|ArcBest Corporation||$2.77 billion||0.26||$146.83 million||$0.86||33.02|
|Norfolk Souther Corporation||$10.23 billion||3.61||$4.29 billion||$6.16||20.79|
Norfolk Souther Corporation has higher revenue and earnings than ArcBest Corporation. Norfolk Souther Corporation is trading at a lower price-to-earnings ratio than ArcBest Corporation, indicating that it is currently the more affordable of the two stocks.
ArcBest Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 1.1%. Norfolk Souther Corporation pays an annual dividend of $2.44 per share and has a dividend yield of 1.9%. ArcBest Corporation pays out 37.2% of its earnings in the form of a dividend. Norfolk Souther Corporation pays out 39.6% 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. ArcBest Corporation has increased its dividend for 7 consecutive years.
This is a breakdown of current ratings and target prices for ArcBest Corporation and Norfolk Souther Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Norfolk Souther Corporation||3||12||7||0||2.18|
ArcBest Corporation presently has a consensus price target of $29.00, suggesting a potential upside of 2.11%. Norfolk Souther Corporation has a consensus price target of $112.15, suggesting a potential downside of 12.41%. Given ArcBest Corporation’s higher possible upside, equities research analysts clearly believe ArcBest Corporation is more favorable than Norfolk Souther Corporation.
Norfolk Souther Corporation beats ArcBest Corporation on 10 of the 17 factors compared between the two stocks.
About ArcBest Corporation
ArcBest Corporation is a holding company of businesses providing integrated logistics solutions. The Company operates through three segments: Asset-Based, which consists of ABF Freight System, Inc. and other subsidiaries; ArcBest, which represents the consolidation of the operations of the Premium Logistics, Transportation Management and Household Goods Moving Services segments, and FleetNet, which includes the results of operations of FleetNet America, Inc. (FleetNet). Its Asset-Based operations offer transportation of general commodities through standard, time-critical, expedited and guaranteed LTL services-nationally and regionally. Its ArcBest segment includes truckload, expedite, international, warehousing, freight transportation, management services and moving services. Its FleetNet segment provides roadside assistance and maintenance management services for commercial vehicles to customers in the United States and Canada through a network of third-party service providers.
About Norfolk Souther Corporation
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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