Universal Logistics (ULH) & Heartland Express (HTLD) Critical Analysis

Universal Logistics (NASDAQ: ULH) and Heartland Express (NASDAQ:HTLD) are both small-cap industrials companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, analyst recommendations, dividends, valuation, risk, profitability and institutional ownership.

Volatility and Risk

Universal Logistics has a beta of 1.58, indicating that its stock price is 58% more volatile than the S&P 500. Comparatively, Heartland Express has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Institutional & Insider Ownership

27.8% of Universal Logistics shares are owned by institutional investors. Comparatively, 59.3% of Heartland Express shares are owned by institutional investors. 71.0% of Universal Logistics shares are owned by company insiders. Comparatively, 42.1% of Heartland Express shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Universal Logistics and Heartland Express’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Universal Logistics 0.55% 11.59% 2.94%
Heartland Express 8.54% 9.50% 6.54%

Dividends

Universal Logistics pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Heartland Express pays an annual dividend of $0.08 per share and has a dividend yield of 0.3%. Universal Logistics pays out 121.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Heartland Express pays out 13.3% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Universal Logistics and Heartland Express’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Universal Logistics $1.07 billion 0.63 $24.24 million $0.23 103.26
Heartland Express $612.94 million 3.14 $56.38 million $0.60 38.47

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Universal Logistics and Heartland Express, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Logistics 0 2 1 0 2.33
Heartland Express 3 1 1 0 1.60

Universal Logistics presently has a consensus price target of $23.00, suggesting a potential downside of 3.16%. Heartland Express has a consensus price target of $23.75, suggesting a potential upside of 2.90%. Given Heartland Express’ higher possible upside, analysts plainly believe Heartland Express is more favorable than Universal Logistics.

Summary

Heartland Express beats Universal Logistics on 8 of the 15 factors compared between the two stocks.

Universal Logistics Company Profile

Universal Logistics Holdings, Inc., formerly Universal Truckload Services, Inc., is an asset-light provider of customized transportation and logistics solutions across the United States, Mexico, Canada and Colombia. The Company operates through two segments: the transportation segment and the logistics segment. The Company’s operations aggregated in the transportation segment are associated with individual freight shipments coordinated by its agents, company-managed terminals and specialized services operations. The Company’s operations aggregated in the logistics segment deliver value-added services and transportation services to specific customers. Its other operating segments consist of the Company’s subsidiaries that provide support services to other subsidiaries and to owner-operators, including shop maintenance and equipment leasing. The Company groups its services into three service categories: transportation, value-added and intermodal support.

Heartland Express Company Profile

Heartland Express, Inc. is a holding company. The Company is a short-to-medium haul truckload carrier. The Company focuses primarily on short- to medium-haul, asset-based dry van truckload services in regional markets near its terminals. The Company’s truckload services are primarily asset-based transportation services in the dry van truckload market, and it also offers truckload temperature-controlled transportation services and non-asset based brokerage services. All tractors are equipped with mobile communication systems. Its primary customers include retailers and manufacturers. It provides nationwide asset-based dry van truckload service for shippers from Washington to Florida and New England to California. The Company provides truckload services across the United States and parts of Canada. As of December 31, 2016, it had operated 20 terminal facilities throughout the contiguous United States in addition to its terminal and corporate headquarters in North Liberty, Iowa.

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