Knight-Swift Transportation (NYSE:KNX) and Union Pacific (NYSE:UNP) Financial Survey

Union Pacific (NYSE:UNP) and Knight-Swift Transportation (NYSE:KNX) are both large-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, institutional ownership, dividends, profitability, risk and valuation.

Analyst Ratings

This is a summary of current recommendations for Union Pacific and Knight-Swift Transportation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Union Pacific	0	4	15	2	2.90
Knight-Swift Transportation	0	3	15	2	2.95

Union Pacific presently has a consensus target price of $327.00, indicating a potential upside of 17.54%. Knight-Swift Transportation has a consensus target price of $85.06, indicating a potential upside of 27.30%. Given Knight-Swift Transportation’s stronger consensus rating and higher possible upside, analysts clearly believe Knight-Swift Transportation is more favorable than Union Pacific.

Dividends

Union Pacific pays an annual dividend of $5.68 per share and has a dividend yield of 2.0%. Knight-Swift Transportation pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. Union Pacific pays out 46.0% of its earnings in the form of a dividend. Knight-Swift Transportation pays out 307.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Union Pacific has raised its dividend for 18 consecutive years and Knight-Swift Transportation has raised its dividend for 6 consecutive years. Union Pacific is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider and Institutional Ownership

80.4% of Union Pacific shares are owned by institutional investors. Comparatively, 88.8% of Knight-Swift Transportation shares are owned by institutional investors. 0.2% of Union Pacific shares are owned by company insiders. Comparatively, 2.9% of Knight-Swift Transportation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility & Risk

Union Pacific has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500. Comparatively, Knight-Swift Transportation has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Union Pacific	28.85%	38.46%	10.45%
Knight-Swift Transportation	0.56%	3.51%	2.04%

Valuation & Earnings

This table compares Union Pacific and Knight-Swift Transportation”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Union Pacific	$24.51 billion	6.74	$7.14 billion	$12.35	22.53
Knight-Swift Transportation	$7.47 billion	1.46	$65.95 million	$0.26	256.97

Union Pacific has higher revenue and earnings than Knight-Swift Transportation. Union Pacific 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

Union Pacific beats Knight-Swift Transportation on 10 of the 16 factors compared between the two stocks.

About Union Pacific

Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska.

About Knight-Swift Transportation

Knight-Swift Transportation Holdings Inc., together with its subsidiaries, provides freight transportation services in the United States and Mexico. The company operates through four segments: Truckload, Less-than-truckload (LTL), Logistics, and Intermodal. The Truckload segment provides transportation services, which include irregular route and dedicated, refrigerated, expedited, flatbed, and cross-border operations. This segment operated an average of 20,948 tractors, which comprised 18,821 company tractors and 2,127 independent contractor tractors, as well as 87,865 trailers. The LTL segment provides regional LTL transportation services through a network of approximately 120 service centers; and offers national coverage through partner carrier outside the network. This segment operated an average of 3,201 tractors and 8,482 trailers. The Logistic segment offers brokerage and other freight management services through third-party transportation providers and equipment. The Intermodal segment offers transportation services, including freight through third-party intermodal rail services on trailing equipment, such as containers and trailers on flat cars; and drayage services. This segment operated an average of 639 tractors and 12,730 intermodal containers. The company also provides repair and maintenance shop, equipment leasing, warranty, and insurance services; and warehousing and driving academy services, as well as manufactures trailer parts. It serves retail, food and beverage, consumer and paper products, transportation and logistics, housing, and building, automotive, and manufacturing industries. Knight-Swift Transportation Holdings Inc. was incorporated in 1989 and is headquartered in Phoenix, Arizona.