Contrasting Canadian National Railway (NYSE:CNI) and Marten Transport (NASDAQ:MRTN)

Marten Transport (NASDAQ:MRTN) and Canadian National Railway (NYSE:CNI) are both industrials companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, institutional ownership, analyst recommendations, earnings and valuation.

Volatility and Risk

Marten Transport has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500. Comparatively, Canadian National Railway has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Profitability

This table compares Marten Transport and Canadian National Railway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Marten Transport	1.47%	1.65%	1.32%
Canadian National Railway	26.92%	22.22%	8.12%

Dividends

Marten Transport pays an annual dividend of $0.24 per share and has a dividend yield of 1.6%. Canadian National Railway pays an annual dividend of $2.67 per share and has a dividend yield of 2.1%. Marten Transport pays out 141.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Canadian National Railway pays out 47.3% of its earnings in the form of a dividend. Canadian National Railway has increased its dividend for 3 consecutive years. Canadian National Railway is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Marten Transport and Canadian National Railway, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Marten Transport	0	3	0	1	2.50
Canadian National Railway	0	8	9	0	2.53

Marten Transport presently has a consensus price target of $16.00, suggesting a potential upside of 4.78%. Canadian National Railway has a consensus price target of $137.40, suggesting a potential upside of 8.55%. Given Canadian National Railway’s stronger consensus rating and higher probable upside, analysts clearly believe Canadian National Railway is more favorable than Marten Transport.

Valuation & Earnings

This table compares Marten Transport and Canadian National Railway”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Marten Transport	$883.65 million	1.41	$17.44 million	$0.17	89.82
Canadian National Railway	$12.38 billion	6.18	$3.38 billion	$5.64	22.44

Canadian National Railway has higher revenue and earnings than Marten Transport. Canadian National Railway is trading at a lower price-to-earnings ratio than Marten Transport, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

69.1% of Marten Transport shares are held by institutional investors. Comparatively, 80.7% of Canadian National Railway shares are held by institutional investors. 22.6% of Marten Transport shares are held by insiders. Comparatively, 2.4% of Canadian National Railway shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Summary

Canadian National Railway beats Marten Transport on 14 of the 17 factors compared between the two stocks.

About Marten Transport

Marten Transport, Ltd. operates as a temperature-sensitive truckload carrier for shippers in the United State, Mexico, and Canada. The company operates through four segments: Truckload, Dedicated, Intermodal, and Brokerage. The Truckload segment transports food and other consumer packaged goods that require a temperature-controlled or insulated environment, as well as dry freight; and regional short-haul and medium-to-long-haul full-load transportation services. The Dedicated segment offers customized transportation solutions for individual customers' requirements using temperature-controlled trailers, dry vans, and other specialized equipment. The Intermodal segment transports customers' freight utilizing its refrigerated containers and temperature-controlled trailers on railroad flatcars for portions of trips, as well as using tractors and contracted carriers. The Brokerage segment develops contractual relationships with and arranges for third-party carriers to transport freight for customers in temperature-controlled trailers and dry vans. As of December 31, 2023, the company operated a fleet of 3,349 tractors, that included 3,255 company-owned tractors and 94 tractors supplied by independent contractors. Marten Transport, Ltd. was founded in 1946 and is headquartered in Mondovi, Wisconsin.

About Canadian National Railway

Canadian National Railway Company, together with its subsidiaries, engages in the rail, intermodal, trucking, and marine transportation and logistics business in Canada and the United States. The company provides rail services, which include equipment, custom brokerage services, transloading and distribution, business development and real estate, and private car storage services; and intermodal services, such as temperature controlled cargo, port partnerships, and logistics parks. It offers trucking services, such as door-to-door services, import and export dray, interline services, and specialized services, comprising flatbed trucks, on-deck mobile transport trays, expedited cargo, and permit/overweight services; and supply chain services. It serves automotive, coal, fertilizers, temperature controlled cargo, forest products, dimensional, grain, metal and minerals, petroleum and chemicals, consumer goods, and third party logistics applications. The company operates a rail network of approximately 20,000 route-miles of track and shipping spanning. Canadian National Railway Company was incorporated in 1919 and is headquartered in Montreal, Canada.