Analyzing Union Pacific (NYSE:UNP) & Heartland Express (NASDAQ:HTLD)

Union Pacific (NYSE:UNP) and Heartland Express (NASDAQ:HTLD) are both industrials companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Profitability

This table compares Union Pacific and Heartland Express’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Union Pacific	28.85%	38.46%	10.45%
Heartland Express	-2.98%	-0.92%	-0.58%

Earnings and Valuation

This table compares Union Pacific and Heartland Express”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Union Pacific	$24.51 billion	6.97	$7.14 billion	$12.35	23.29
Heartland Express	$805.71 million	0.99	-$52.45 million	($0.28)	-36.68

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

Risk & Volatility

Union Pacific has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500. Comparatively, Heartland Express has a beta of 1.35, indicating that its share price is 35% more volatile than the S&P 500.

Dividends

Union Pacific pays an annual dividend of $5.68 per share and has a dividend yield of 2.0%. Heartland Express pays an annual dividend of $0.08 per share and has a dividend yield of 0.8%. Union Pacific pays out 46.0% of its earnings in the form of a dividend. Heartland Express pays out -28.6% 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. 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.

Insider & Institutional Ownership

80.4% of Union Pacific shares are owned by institutional investors. Comparatively, 53.4% of Heartland Express shares are owned by institutional investors. 0.2% of Union Pacific shares are owned by company insiders. Comparatively, 41.6% of Heartland Express shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Union Pacific and Heartland Express, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Union Pacific	0	4	15	2	2.90
Heartland Express	3	4	0	0	1.57

Union Pacific currently has a consensus target price of $325.00, indicating a potential upside of 12.98%. Heartland Express has a consensus target price of $12.40, indicating a potential upside of 20.74%. Given Heartland Express’ higher probable upside, analysts plainly believe Heartland Express is more favorable than Union Pacific.

Summary

Union Pacific beats Heartland Express on 13 of the 17 factors compared between the two stocks.

About Union Pacific

Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska.

About Heartland Express

Heartland Express, Inc., together with its subsidiaries, operates as a short-to-medium, and long-haul truckload carrier in the United States and Canada. It primarily provides nationwide asset-based dry van truckload service for shippers; cross-border freight and other transportation services; and temperature-controlled truckload services. The company offers its services under the Heartland Express and Millis Transfer brand names. It primarily serves retailers and manufacturers in consumer goods, appliances, food products, and automotive industries. The company was founded in 1978 and is headquartered in North Liberty, Iowa.