Critical Survey: Universal Logistics (NASDAQ:ULH) and Matson (NYSE:MATX)

Universal Logistics (NASDAQ:ULH) and Matson (NYSE:MATX) are both transportation companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, risk, valuation, dividends and earnings.

Analyst Ratings

This is a breakdown of recent ratings for Universal Logistics and Matson, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Universal Logistics	1	1	0	1	2.33
Matson	0	4	2	0	2.33

Universal Logistics presently has a consensus price target of $17.00, indicating a potential downside of 14.96%. Matson has a consensus price target of $156.25, indicating a potential downside of 1.09%. Given Matson’s higher probable upside, analysts plainly believe Matson is more favorable than Universal Logistics.

Institutional & Insider Ownership

25.5% of Universal Logistics shares are owned by institutional investors. Comparatively, 84.8% of Matson shares are owned by institutional investors. 73.6% of Universal Logistics shares are owned by insiders. Comparatively, 2.5% of Matson shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Universal Logistics and Matson”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Universal Logistics	$1.56 billion	0.34	-$99.87 million	($2.15)	-9.30
Matson	$3.34 billion	1.44	$444.80 million	$13.94	11.33

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

Dividends

Universal Logistics pays an annual dividend of $0.42 per share and has a dividend yield of 2.1%. Matson pays an annual dividend of $1.44 per share and has a dividend yield of 0.9%. Universal Logistics pays out -19.5% of its earnings in the form of a dividend. Matson pays out 10.3% 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. Universal Logistics is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility & Risk

Universal Logistics has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Matson has a beta of 1.32, meaning that its share price is 32% more volatile than the S&P 500.

Profitability

This table compares Universal Logistics and Matson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Universal Logistics	-3.64%	4.13%	1.36%
Matson	13.30%	16.63%	9.75%

Summary

Matson beats Universal Logistics on 13 of the 17 factors compared between the two stocks.

About Universal Logistics

Universal Logistics Holdings, Inc. provides transportation and logistics solutions in the United States, Mexico, Canada, and Colombia. The company offers truckload services, which include dry van, flatbed, heavy-haul, and refrigerated operations; domestic and international freight forwarding, and customs brokerage services. It transports various commodities comprising automotive parts, machinery, building materials, paper, food, consumer goods, furniture, steel, and other metals. The company also provides value-added services for individual customer requirements, including material handling, consolidation, sequencing, sub-assembly, cross-dock, kitting, repacking, warehousing, and returnable container management; and intermodal support services comprising short-to-medium distance delivery of steamship and rail truck containers between the port or railhead, and the customer. It serves automotive, steel, and other metals, retail and consumer goods, energy, and manufacturing industries, as well as other transportation companies who aggregate loads from various shippers. The company was formerly known as Universal Truckload Services, Inc. and changed its name to Universal Logistics Holdings, Inc. in April 2016. Universal Logistics Holdings, Inc. was founded in 1932 and is headquartered in Warren, Michigan.

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.