Critical Review: Universal Logistics (ULH) versus Old Dominion Freight Line (ODFL)

Universal Logistics (NASDAQ: ULH) and Old Dominion Freight Line (NASDAQ:ODFL) are both transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Institutional and Insider Ownership

27.8% of Universal Logistics shares are owned by institutional investors. Comparatively, 72.4% of Old Dominion Freight Line shares are owned by institutional investors. 71.0% of Universal Logistics shares are owned by company insiders. Comparatively, 12.0% of Old Dominion Freight Line shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Universal Logistics has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, Old Dominion Freight Line has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares Universal Logistics and Old Dominion Freight Line’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 $1.07 billion 0.62 $24.24 million $0.23 101.52
Old Dominion Freight Line $2.99 billion 3.56 $295.76 million $4.06 31.83

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

Profitability

This table compares Universal Logistics and Old Dominion Freight Line’s 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%
Old Dominion Freight Line 10.43% 17.09% 11.93%

Dividends

Universal Logistics pays an annual dividend of $0.28 per share and has a dividend yield of 1.2%. Old Dominion Freight Line pays an annual dividend of $0.40 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. Old Dominion Freight Line pays out 9.9% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Universal Logistics and Old Dominion Freight Line, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Universal Logistics 0 2 1 0 2.33
Old Dominion Freight Line 1 7 4 0 2.25

Universal Logistics presently has a consensus price target of $23.00, suggesting a potential downside of 1.50%. Old Dominion Freight Line has a consensus price target of $107.00, suggesting a potential downside of 17.21%. Given Universal Logistics’ stronger consensus rating and higher probable upside, analysts plainly believe Universal Logistics is more favorable than Old Dominion Freight Line.

Summary

Old Dominion Freight Line beats Universal Logistics on 10 of the 16 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.

Old Dominion Freight Line Company Profile

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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