Matson (NYSE:MATX) and ZTO Express (Cayman) (NYSE:ZTO) Critical Review

Matson (NYSE:MATX) and ZTO Express (Cayman) (NYSE:ZTO) are both transportation companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, profitability, dividends, earnings, valuation and institutional ownership.

Volatility & Risk

Matson has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500. Comparatively, ZTO Express (Cayman) has a beta of -0.22, indicating that its share price is 122% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for Matson and ZTO Express (Cayman), as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matson	0	3	3	0	2.50
ZTO Express (Cayman)	0	3	2	1	2.67

Matson presently has a consensus target price of $181.25, indicating a potential downside of 6.54%. ZTO Express (Cayman) has a consensus target price of $27.03, indicating a potential upside of 20.33%. Given ZTO Express (Cayman)’s stronger consensus rating and higher possible upside, analysts plainly believe ZTO Express (Cayman) is more favorable than Matson.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Matson	12.92%	15.90%	9.38%
ZTO Express (Cayman)	17.87%	14.23%	9.90%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matson	$3.32 billion	1.77	$444.80 million	$13.61	14.25
ZTO Express (Cayman)	$51.49 billion	0.25	$1.30 billion	$1.63	13.78

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

Insider & Institutional Ownership

84.8% of Matson shares are held by institutional investors. Comparatively, 41.7% of ZTO Express (Cayman) shares are held by institutional investors. 2.5% of Matson shares are held by insiders. Comparatively, 41.3% of ZTO Express (Cayman) shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

Matson pays an annual dividend of $1.44 per share and has a dividend yield of 0.7%. ZTO Express (Cayman) pays an annual dividend of $0.76 per share and has a dividend yield of 3.4%. Matson pays out 10.6% of its earnings in the form of a dividend. ZTO Express (Cayman) pays out 46.6% 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. Matson has increased its dividend for 13 consecutive years.

About Matson

Matson, Inc., together with its subsidiaries, engages in the provision of ocean transportation and logistics services. It operates through two segments, Ocean Transportation and Logistics. The Ocean Transportation segment offers ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Japan, Alaska, and Guam, as well as to other island economies in Micronesia. It primarily transports dry containers of mixed commodities, refrigerated commodities, food products, beverages, building materials, automobiles, and household goods; livestock; seafood; general sustenance cargo; and garments, footwear, e-commerce, and other retail merchandise. This segment also operates an expedited service from China to Long Beach, California, and various islands in the South Pacific, as well as Okinawa, Japan; and provides stevedoring, refrigerated cargo services, inland transportation, container equipment maintenance, and other terminal services to ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui, and Kauai, as well as in the Alaska locations of Anchorage, Kodiak, and Dutch Harbor. In addition, it offers vessel management and container transshipment services. The Logistics segment provides multimodal transportation brokerage services, including domestic and international rail intermodal, long-haul and regional highway trucking, specialized hauling, flat-bed and project, less-than-truckload, and expedited freight services; less-than-container load consolidation and freight forwarding services; warehousing and distribution services; supply chain management services, and non-vessel operating common carrier freight forwarding services. It serves the U.S. military, freight forwarders, retailers, consumer goods, automobile manufacturers, and other customers. The company was formerly known as Alexander & Baldwin Holdings, Inc. and changed its name to Matson, Inc. in June 2012. Matson, Inc. was founded in 1882 and is headquartered in Honolulu, Hawaii.

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.