Contrasting Heartland Express (HTLD) and Old Dominion Freight Line (ODFL)

Heartland Express (NASDAQ: HTLD) and Old Dominion Freight Line (NASDAQ:ODFL) are both transportation companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, profitability, valuation, earnings and risk.

Earnings and Valuation

This table compares Heartland Express and Old Dominion Freight Line’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Heartland Express $548.88 million 3.20 $165.30 million $0.66 31.97
Old Dominion Freight Line $3.12 billion 2.56 $718.76 million $3.85 25.16

Old Dominion Freight Line has higher revenue and earnings than Heartland Express. Old Dominion Freight Line is trading at a lower price-to-earnings ratio than Heartland Express, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

60.8% of Heartland Express shares are held by institutional investors. Comparatively, 75.1% of Old Dominion Freight Line shares are held by institutional investors. 42.1% of Heartland Express shares are held by company insiders. Comparatively, 12.0% of Old Dominion Freight Line shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Heartland Express and Old Dominion Freight Line’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Heartland Express 9.89% 10.60% 7.28%
Old Dominion Freight Line 10.19% 16.87% 11.61%

Dividends

Heartland Express pays an annual dividend of $0.08 per share and has a dividend yield of 0.4%. Old Dominion Freight Line pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Heartland Express pays out 12.1% of its earnings in the form of a dividend. Old Dominion Freight Line pays out 10.4% 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. Old Dominion Freight Line is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk and Volatility

Heartland Express has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500. Comparatively, Old Dominion Freight Line has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings for Heartland Express and Old Dominion Freight Line, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Heartland Express 2 10 1 0 1.92
Old Dominion Freight Line 0 5 3 0 2.38

Heartland Express currently has a consensus price target of $15.11, suggesting a potential downside of 28.38%. Old Dominion Freight Line has a consensus price target of $96.13, suggesting a potential downside of 0.78%. Given Old Dominion Freight Line’s stronger consensus rating and higher probable upside, analysts clearly believe Old Dominion Freight Line is more favorable than Heartland Express.

Summary

Old Dominion Freight Line beats Heartland Express on 13 of the 16 factors compared between the two stocks.

About Heartland Express

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.

About Old Dominion Freight Line

Old Dominion Freight Line, Inc. is a union-free motor carrier providing regional, inter-regional and national less-than-truckload (LTL) services. The Company’s LTL services include ground and air expedited transportation for time-sensitive shipments, consumer household pickup and delivery and freight delivery services throughout North America. In addition to its LTL services, the Company offers a range of other value-added services that include container drayage, truckload brokerage, supply chain consulting and warehousing. As of December 31, 2016, the Company operated 226 service center locations, of which it owned 182 and leased 44. As of December 31, 2016, its network included 10 breakbulk facilities located in Rialto, California; Atlanta, Georgia; Columbus, Ohio; Indianapolis, Indiana; Greensboro, North Carolina; Harrisburg, Pennsylvania; Memphis and Morristown, Tennessee; Dallas, Texas, and Salt Lake City, Utah. As of December 31, 2016, the Company owned 7,994 tractors.

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