Financial Analysis: Covenant Logistics Group (CVLG) and The Competition

Covenant Logistics Group (NYSE:CVLG) is one of 102 publicly-traded companies in the “Ground Transportation” industry, but how does it compare to its peers? We will compare Covenant Logistics Group to similar companies based on the strength of its dividends, institutional ownership, risk, profitability, analyst recommendations, valuation and earnings.

Institutional & Insider Ownership

83.7% of Covenant Logistics Group shares are owned by institutional investors. Comparatively, 59.7% of shares of all “Ground Transportation” companies are owned by institutional investors. 36.7% of Covenant Logistics Group shares are owned by company insiders. Comparatively, 15.2% of shares of all “Ground Transportation” companies are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Covenant Logistics Group and its peers gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Covenant Logistics Group	$1.16 billion	$7.24 million	240.20
Covenant Logistics Group Competitors	$8.97 billion	$895.12 million	43.54

Covenant Logistics Group’s peers have higher revenue and earnings than Covenant Logistics Group. Covenant Logistics Group is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Profitability

This table compares Covenant Logistics Group and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Covenant Logistics Group	0.31%	9.15%	3.66%
Covenant Logistics Group Competitors	5.42%	9.14%	3.72%

Analyst Ratings

This is a breakdown of recent ratings and target prices for Covenant Logistics Group and its peers, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Covenant Logistics Group	0	1	4	1	3.00
Covenant Logistics Group Competitors	1326	6292	8372	247	2.46

Covenant Logistics Group currently has a consensus target price of $52.25, indicating a potential upside of 45.02%. As a group, “Ground Transportation” companies have a potential upside of 13.39%. Given Covenant Logistics Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Covenant Logistics Group is more favorable than its peers.

Dividends

Covenant Logistics Group pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Covenant Logistics Group pays out 186.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Ground Transportation” companies pay a dividend yield of 1.4% and pay out 27.6% of their earnings in the form of a dividend. Covenant Logistics Group has increased its dividend for 1 consecutive years. Covenant Logistics Group lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Volatility & Risk

Covenant Logistics Group has a beta of 1.29, meaning that its stock price is 29% more volatile than the S&P 500. Comparatively, Covenant Logistics Group’s peers have a beta of 1.13, meaning that their average stock price is 13% more volatile than the S&P 500.

Summary

Covenant Logistics Group beats its peers on 9 of the 15 factors compared.

Covenant Logistics Group Company Profile

Covenant Logistics Group, Inc., together with its subsidiaries, provides transportation and logistics services in the United States. It operates through four segments: Expedited, Dedicated, Managed Freight, and Warehousing. The Expedited segment primarily provides truckload services with high service freight and delivery standards, such as 1,000 miles in 22 hours or 15-minute delivery windows. The Dedicated segment provides customers with committed truckload capacity over contracted periods using equipment either owned or leased by the company. The Managed Freight segment offers brokerage services, including logistics capacity by outsourcing the carriage of customers’ freight to third parties; and transport management services, such as logistics services on a contractual basis to customers who prefer to outsource their logistics needs. The Warehousing segment provides day-to-day warehouse management services to customers. The segment also provides shuttle and switching services to shuttling containers and trailers. The company also engages in used equipment sales and leasing business. It serves transportation companies, such as parcel freight forwarders, less-than-truckload carriers, and third-party logistics providers; and traditional truckload customers, including manufacturers, retailers, and food and beverage shippers. As of December 31, 2021, it operated 2,291 tractors and 5,331 trailers. The company was formerly known as Covenant Transportation Group, Inc. and changed its name to Covenant Logistics Group, Inc. in July 2020. Covenant Logistics Group, Inc. was founded in 1986 and is based in Chattanooga, Tennessee.