Critical Survey: ZTO Express (Cayman) (NYSE:ZTO) & DSV (OTCMKTS:DSDVY)

DSV (OTCMKTS:DSDVY) and ZTO Express (Cayman) (NYSE:ZTO) are both large-cap transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, valuation, risk, analyst recommendations and earnings.

Volatility and Risk

DSV has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, ZTO Express (Cayman) has a beta of -0.2, meaning that its share price is 120% less volatile than the S&P 500.

Dividends

DSV pays an annual dividend of $0.30 per share and has a dividend yield of 0.2%. ZTO Express (Cayman) pays an annual dividend of $0.58 per share and has a dividend yield of 2.7%. DSV pays out 10.2% of its earnings in the form of a dividend. ZTO Express (Cayman) pays out 38.4% 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.

Profitability

This table compares DSV and ZTO Express (Cayman)’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DSV	4.23%	10.92%	4.63%
ZTO Express (Cayman)	18.61%	14.33%	9.89%

Valuation & Earnings

This table compares DSV and ZTO Express (Cayman)”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DSV	$24.24 billion	2.55	$1.47 billion	$2.94	43.74
ZTO Express (Cayman)	$6.07 billion	2.10	$1.21 billion	$1.51	14.09

DSV has higher revenue and earnings than ZTO Express (Cayman). ZTO Express (Cayman) is trading at a lower price-to-earnings ratio than DSV, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

0.2% of DSV shares are owned by institutional investors. Comparatively, 41.7% of ZTO Express (Cayman) shares are owned by institutional investors. 41.3% of ZTO Express (Cayman) shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for DSV and ZTO Express (Cayman), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DSV	0	2	1	1	2.75
ZTO Express (Cayman)	0	2	3	2	3.00

ZTO Express (Cayman) has a consensus target price of $22.36, indicating a potential upside of 5.12%. Given ZTO Express (Cayman)’s stronger consensus rating and higher possible upside, analysts clearly believe ZTO Express (Cayman) is more favorable than DSV.

Summary

ZTO Express (Cayman) beats DSV on 10 of the 17 factors compared between the two stocks.

About DSV

DSV A/S offers transport and logistics services in Europe, the Middle East, Africa, North America, South America, Asia, Australia, and the Pacific. It operates through three segments: Air & Sea, Road, and Solutions. The company provides air freight, air freight compliance and carrier, and rail freight services; sea freight, and sea freight compliance and carrier services, as well as freight containers. It also offers road freight services, such as part and full loads, groupage, specialized transport, express, and online and document handling services; and workshops. In addition, the company provides logistics solutions for automotive, technology, healthcare, energy, industrial, retail/ fashion, and chemical sectors; and inventory management solutions. Further, it offers special project transport services, such as industrial projects, renewable energy, government logistics, ship charter, and air charter services; and courier and warehousing services. The company was formerly known as DSV Panalpina A/S and changed its name to DSV A/S in September 2021. DSV A/S was incorporated in 1976 and is based in Hedehusene, Denmark.

About ZTO Express (Cayman)

ZTO Express (Cayman) Inc. provides express delivery and other value-added logistics services in the People's Republic of China. It offers freight forwarding services; and delivery services for e-commerce and traditional merchants, and other express service users. The company was founded in 2002 and is headquartered in Shanghai, the People's Republic of China.