Werner Enterprises (NASDAQ:WERN) versus Canadian Pacific Kansas City (NYSE:CP) Head-To-Head Analysis

Werner Enterprises (NASDAQ:WERN) and Canadian Pacific Kansas City (NYSE:CP) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Werner Enterprises and Canadian Pacific Kansas City, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Werner Enterprises	3	8	4	1	2.19
Canadian Pacific Kansas City	0	3	11	1	2.87

Werner Enterprises presently has a consensus target price of $41.54, indicating a potential upside of 20.72%. Canadian Pacific Kansas City has a consensus target price of $108.60, indicating a potential upside of 22.92%. Given Canadian Pacific Kansas City’s stronger consensus rating and higher possible upside, analysts clearly believe Canadian Pacific Kansas City is more favorable than Werner Enterprises.

Dividends

Werner Enterprises pays an annual dividend of $0.56 per share and has a dividend yield of 1.6%. Canadian Pacific Kansas City pays an annual dividend of $0.78 per share and has a dividend yield of 0.9%. Werner Enterprises pays out -73.7% of its earnings in the form of a dividend. Canadian Pacific Kansas City pays out 25.1% 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. Werner Enterprises has raised its dividend for 4 consecutive years. Werner Enterprises is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

89.3% of Werner Enterprises shares are owned by institutional investors. Comparatively, 72.2% of Canadian Pacific Kansas City shares are owned by institutional investors. 1.3% of Werner Enterprises shares are owned by insiders. Comparatively, 0.0% of Canadian Pacific Kansas City shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Werner Enterprises and Canadian Pacific Kansas City’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Werner Enterprises	-1.42%	1.18%	0.52%
Canadian Pacific Kansas City	25.02%	9.02%	4.86%

Risk and Volatility

Werner Enterprises has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, Canadian Pacific Kansas City has a beta of 1.12, suggesting that its stock price is 12% more volatile than the S&P 500.

Valuation and Earnings

This table compares Werner Enterprises and Canadian Pacific Kansas City”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Werner Enterprises	$2.97 billion	0.69	-$14.40 million	($0.76)	-45.28
Canadian Pacific Kansas City	$10.79 billion	7.19	$2.96 billion	$3.11	28.41

Canadian Pacific Kansas City has higher revenue and earnings than Werner Enterprises. Werner Enterprises is trading at a lower price-to-earnings ratio than Canadian Pacific Kansas City, indicating that it is currently the more affordable of the two stocks.

Summary

Canadian Pacific Kansas City beats Werner Enterprises on 11 of the 17 factors compared between the two stocks.

About Werner Enterprises

Werner Enterprises, Inc., together with its subsidiaries, engages in transporting truckload shipments of general commodities in interstate and intrastate commerce in the United States, Mexico, and internationally. The company operates through two segments, Truckload Transportation Services and Werner Logistics. The Truckload Transportation Services segment operates a fleet of medium-to-long-haul vans that transports various consumer nondurable products and other commodities in truckload quantities using dry van trailers; the expedited fleet, which offers time-sensitive truckload services using driver teams; a regional short-haul fleet that provides truckload van service in the United States; and temperature-controlled fleet, which offers truckload services for temperature-sensitive products using temperature-controlled trailers. This segment provides truckload services to retail distribution centers or manufacturing facilities using dry vans or trailers to transport retail store merchandise, consumer products, food and beverage products, and manufactured products. As of December 31, 2023, it had a fleet of 8,000 trucks, which included 7,740 company-operated, as well as 260 owned and operated by independent contractors; and 30,810 trailers that comprised dry vans, flatbeds, temperature-controlled, and other trailers. The Werner Logistics segment provides non-asset-based transportation and logistics services, including truck brokerage; logistics management services and solutions; rail transportation through alliances with rail and drayage providers; and residential and commercial deliveries of large or heavy items using liftgate straight trucks. As of December 31, 2023, this segment operated 35 drayage tractors and 115 delivery trucks. It also sells used trucks and trailers; and trades used trucks to original equipment manufacturers. The company was founded in 1956 and is headquartered in Omaha, Nebraska.

About Canadian Pacific Kansas City

Canadian Pacific Kansas City Limited, together with its subsidiaries, owns and operates a transcontinental freight railway in Canada, the United States, and Mexico. The company transports bulk commodities, including grain, coal, potash, fertilizers, and sulphur; merchandise freight, such as forest products, energy, chemicals and plastics, metals, minerals, consumer products, and automotive; and intermodal traffic comprising retail goods in overseas containers. It also provides rail and intermodal transportation services over a network of approximately 20,000 miles serving business centres. The company was formerly known as Canadian Pacific Railway Limited and changed its name to Canadian Pacific Kansas City Limited in April 2023. Canadian Pacific Kansas City Limited was incorporated in 1881 and is headquartered in Calgary, Canada.