Financial Analysis: Hub Group (HUBG) & Expeditors International of Washington (EXPD)

Hub Group (NASDAQ: HUBG) and Expeditors International of Washington (NASDAQ:EXPD) are both transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, risk, profitability, valuation, dividends, institutional ownership and analyst recommendations.

Analyst Recommendations

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This is a breakdown of current ratings and recommmendations for Hub Group and Expeditors International of Washington, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hub Group 1 9 3 0 2.15
Expeditors International of Washington 2 5 1 0 1.88

Hub Group presently has a consensus price target of $47.17, indicating a potential upside of 6.23%. Expeditors International of Washington has a consensus price target of $62.14, indicating a potential downside of 4.10%. Given Hub Group’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Hub Group is more favorable than Expeditors International of Washington.

Dividends

Expeditors International of Washington pays an annual dividend of $0.84 per share and has a dividend yield of 1.3%. Hub Group does not pay a dividend. Expeditors International of Washington pays out 33.9% of its earnings in the form of a dividend. Expeditors International of Washington has raised its dividend for 23 consecutive years.

Valuation & Earnings

This table compares Hub Group and Expeditors International of Washington’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hub Group $4.03 billion 0.37 $135.15 million $1.91 23.25
Expeditors International of Washington $6.92 billion 1.64 $489.34 million $2.48 26.13

Expeditors International of Washington has higher revenue and earnings than Hub Group. Hub Group is trading at a lower price-to-earnings ratio than Expeditors International of Washington, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Hub Group has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500. Comparatively, Expeditors International of Washington has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500.

Insider and Institutional Ownership

94.7% of Hub Group shares are owned by institutional investors. Comparatively, 92.4% of Expeditors International of Washington shares are owned by institutional investors. 5.8% of Hub Group shares are owned by company insiders. Comparatively, 1.0% of Expeditors International of Washington shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Hub Group and Expeditors International of Washington’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hub Group 3.35% 9.36% 4.27%
Expeditors International of Washington 7.07% 22.79% 14.87%

Summary

Expeditors International of Washington beats Hub Group on 10 of the 17 factors compared between the two stocks.

Hub Group Company Profile

Hub Group, Inc. is an asset-light freight transportation management company. The Company offers intermodal, truck brokerage and logistics services. It operates through two business segments: Mode and Hub. The Mode segment markets and operates its freight transportation services, consisting of intermodal, truck brokerage and logistics, primarily through agents entering into contractual arrangements with Mode Transportation, LLC (Mode LLC). The Mode segment also operates a temperature protected services division. The Hub segment provides intermodal, truck brokerage and logistics services through a network of operating centers throughout the United States, Canada and Mexico. The Hub segment services customers in a range of industries, including consumer products, retail and durable goods. It operates through a network of operating centers and independent business owners. The Company also provides drayage services with its own drayage operations.

Expeditors International of Washington Company Profile

Expeditors International of Washington, Inc. provides logistics services in the Americas, North Asia, South Asia, Europe, the Middle East, Africa, and India. The company offers airfreight services, such as air freight consolidation and forwarding; ocean freight and ocean services, such as ocean freight consolidation, direct ocean forwarding, and order management; customs brokerage, intra-continental ground transportation and delivery, and warehousing and distribution services; and customs clearance, purchase order management, vendor consolidation, time-definite transportation services, cargo insurance, cargo monitoring and tracking, and other logistics solutions. It acts as a freight consolidator or as an agent for the airline, which carries the shipment. The company also provides ancillary services that include preparation of shipping and customs documentation, packing, crating, insurance services, negotiation of letters of credit, and the preparation of documentation to comply with local export laws. Its customers include retailing and wholesaling, electronics, and industrial and manufacturing companies. Expeditors International of Washington, Inc. was founded in 1979 and is headquartered in Seattle, Washington.

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