Contrasting Union Pacific (NYSE:UNP) & Schneider National (NYSE:SNDR)

Schneider National (NYSE:SNDR) and Union Pacific (NYSE:UNP) are both industrials companies, but which is the superior business? We will contrast the two companies based on the strength of their institutional ownership, risk, dividends, profitability, analyst recommendations, earnings and valuation.

Institutional & Insider Ownership

28.5% of Schneider National shares are held by institutional investors. Comparatively, 80.4% of Union Pacific shares are held by institutional investors. 23.6% of Schneider National shares are held by company insiders. Comparatively, 0.2% of Union Pacific shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Schneider National and Union Pacific’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Schneider National	2.38%	4.82%	2.97%
Union Pacific	28.90%	37.54%	10.68%

Earnings & Valuation

This table compares Schneider National and Union Pacific”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Schneider National	$5.67 billion	0.90	$103.60 million	$0.81	35.88
Union Pacific	$24.51 billion	7.29	$7.14 billion	$12.83	23.45

Union Pacific has higher revenue and earnings than Schneider National. Union Pacific is trading at a lower price-to-earnings ratio than Schneider National, indicating that it is currently the more affordable of the two stocks.

Dividends

Schneider National pays an annual dividend of $0.40 per share and has a dividend yield of 1.4%. Union Pacific pays an annual dividend of $5.68 per share and has a dividend yield of 1.9%. Schneider National pays out 49.4% of its earnings in the form of a dividend. Union Pacific pays out 44.3% 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. Schneider National has increased its dividend for 2 consecutive years and Union Pacific has increased its dividend for 18 consecutive years. Union Pacific is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

Schneider National has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Union Pacific has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Schneider National and Union Pacific, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Schneider National	0	11	5	0	2.31
Union Pacific	0	4	19	1	2.88

Schneider National presently has a consensus target price of $32.92, indicating a potential upside of 13.29%. Union Pacific has a consensus target price of $325.09, indicating a potential upside of 8.06%. Given Schneider National’s higher probable upside, equities research analysts clearly believe Schneider National is more favorable than Union Pacific.

Summary

Union Pacific beats Schneider National on 14 of the 18 factors compared between the two stocks.

About Schneider National

Schneider National, Inc. is a transportation and logistics company that provides freight and supply-chain services across North America. Its offerings include truckload transportation, intermodal shipping, and logistics services such as freight brokerage and supply-chain management. The company serves customers in the United States, Canada, and Mexico, using a network of drivers, equipment, facilities, and transportation partners to move freight through multiple modes. Founded in 1935 by Al Schneider as a single-truck business, the company grew into one of North America’s transportation providers.

About Union Pacific

Union Pacific Corporation operates one of the largest freight rail networks in the United States through its subsidiary, Union Pacific Railroad. Its network serves 23 states across the western two-thirds of the country and connects with other railroads, ports and border crossings, including routes to Mexico and Canada. The company transports a broad range of goods, including agricultural products, industrial materials, coal and energy products, and consumer merchandise. Its services support industries such as manufacturing, construction, agriculture, automotive and retail, with intermodal transportation combining rail with truck and shipping services.