Head-To-Head Analysis: Knight-Swift Transportation (NYSE:KNX) and Canadian National Railway (NYSE:CNI)

Knight-Swift Transportation (NYSE:KNX) and Canadian National Railway (NYSE:CNI) are both large-cap industrials companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current ratings and price targets for Knight-Swift Transportation and Canadian National Railway, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Knight-Swift Transportation	0	3	15	2	2.95
Canadian National Railway	0	9	8	0	2.47

Knight-Swift Transportation presently has a consensus price target of $84.44, suggesting a potential upside of 18.27%. Canadian National Railway has a consensus price target of $137.40, suggesting a potential upside of 8.84%. Given Knight-Swift Transportation’s stronger consensus rating and higher possible upside, analysts clearly believe Knight-Swift Transportation is more favorable than Canadian National Railway.

Earnings and Valuation

This table compares Knight-Swift Transportation and Canadian National Railway”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Knight-Swift Transportation	$7.47 billion	1.56	$65.95 million	$0.26	274.62
Canadian National Railway	$17.76 billion	4.31	$3.38 billion	$5.64	22.38

Canadian National Railway has higher revenue and earnings than Knight-Swift Transportation. Canadian National Railway 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.

Profitability

This table compares Knight-Swift Transportation and Canadian National Railway’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Knight-Swift Transportation	0.56%	3.51%	2.04%
Canadian National Railway	26.92%	22.22%	8.12%

Risk & Volatility

Knight-Swift Transportation has a beta of 1.18, meaning that its stock price is 18% more volatile than the S&P 500. Comparatively, Canadian National Railway has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500.

Institutional & Insider Ownership

88.8% of Knight-Swift Transportation shares are owned by institutional investors. Comparatively, 80.7% of Canadian National Railway shares are owned by institutional investors. 2.9% of Knight-Swift Transportation shares are owned by insiders. Comparatively, 2.4% of Canadian National Railway shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Knight-Swift Transportation pays an annual dividend of $0.80 per share and has a dividend yield of 1.1%. Canadian National Railway pays an annual dividend of $2.59 per share and has a dividend yield of 2.1%. 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. Canadian National Railway pays out 45.9% of its earnings in the form of a dividend. Knight-Swift Transportation has increased its dividend for 6 consecutive years and 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 lower payout ratio.

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.

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.