RXO (NYSE:RXO) versus West Japan Railway (OTCMKTS:WJRYY) Critical Survey

West Japan Railway (OTCMKTS:WJRYY) and RXO (NYSE:RXO) are both mid-cap industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, earnings, dividends, valuation, risk and institutional ownership.

Earnings and Valuation

This table compares West Japan Railway and RXO”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Japan Railway	$12.26 billion	0.68	$841.49 million	$1.67	10.95
RXO	$5.74 billion	0.61	-$100.00 million	($0.61)	-34.98

West Japan Railway has higher revenue and earnings than RXO. RXO is trading at a lower price-to-earnings ratio than West Japan Railway, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares West Japan Railway and RXO’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
West Japan Railway	6.41%	9.37%	3.21%
RXO	-1.72%	-0.98%	-0.45%

Institutional and Insider Ownership

92.7% of RXO shares are held by institutional investors. 0.8% of RXO shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Risk & Volatility

West Japan Railway has a beta of 0.09, indicating that its share price is 91% less volatile than the S&P 500. Comparatively, RXO has a beta of 2.1, indicating that its share price is 110% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for West Japan Railway and RXO, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Japan Railway	0	0	0	1	4.00
RXO	3	10	6	0	2.16

RXO has a consensus target price of $23.62, suggesting a potential upside of 10.69%. Given RXO’s higher probable upside, analysts clearly believe RXO is more favorable than West Japan Railway.

Summary

West Japan Railway beats RXO on 10 of the 15 factors compared between the two stocks.

About West Japan Railway

West Japan Railway Company provides railway transport services in Japan. The company operates through Mobility, Retail, Real Estate, Travel and Regional Solutions, and Other segments. The Mobility segment provides passenger transportation, station operation and management, cleaning and maintenance, construction, machinery and equipment installation, rolling stock and other facility construction services, as well as engages in the railway operations and electric works. The Retail segment sells goods; offers food and other wholesale operation services; and operates department stores. The Real Estate segment sells and leases real estate properties, as well as operates shopping centers and hotels. The Travel and Regional Solutions segment provides travel agency and regional solutions. The Other segment engages in the advertising and other businesses. The company is also involved in the operation of convenience stores, restaurants, and souvenir shops; and provision of credit cards and electronic money services. The company was incorporated in 1987 and is based in Osaka, Japan.

About RXO

RXO, Inc. provides full truckload freight transportation brokering services. It also offers brokered services for managed transportation, last mile, and freight forwarding. The company was incorporated in 2022 and is based in Charlotte, North Carolina.