Hub Group (HUBG) and Covenant Transportation Group (CVTI) Head to Head Analysis

Hub Group (NASDAQ: HUBG) and Covenant Transportation Group (NASDAQ:CVTI) are both small-cap transportation companies, but which is the superior stock? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, institutional ownership, analyst recommendations and risk.

Profitability

This table compares Hub Group and Covenant Transportation Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hub Group 1.50% 9.49% 4.46%
Covenant Transportation Group 1.60% 4.65% 1.77%

Earnings & Valuation

This table compares Hub Group and Covenant Transportation Group’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hub Group $3.73 billion 0.36 $146.62 million $1.69 23.46
Covenant Transportation Group $678.55 million 0.69 $97.66 million $0.60 42.85

Hub Group has higher revenue and earnings than Covenant Transportation Group. Hub Group is trading at a lower price-to-earnings ratio than Covenant Transportation Group, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

91.1% of Hub Group shares are held by institutional investors. Comparatively, 62.1% of Covenant Transportation Group shares are held by institutional investors. 5.4% of Hub Group shares are held by company insiders. Comparatively, 35.2% of Covenant Transportation Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility and Risk

Hub Group has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Covenant Transportation Group has a beta of 1.61, suggesting that its share price is 61% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Hub Group and Covenant Transportation Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hub Group 1 4 3 0 2.25
Covenant Transportation Group 0 2 2 0 2.50

Hub Group currently has a consensus target price of $40.40, indicating a potential upside of 1.89%. Covenant Transportation Group has a consensus target price of $23.00, indicating a potential downside of 10.54%. Given Hub Group’s higher possible upside, equities research analysts clearly believe Hub Group is more favorable than Covenant Transportation Group.

Summary

Hub Group beats Covenant Transportation Group on 8 of the 14 factors compared between the two stocks.

About Hub Group

Hub Group, Inc. is an asset-light freight transportation management company. The Company offers intermodal, truck brokerage and logistics services. It operates through two business segments: Mode and Hub. The Mode segment markets and operates its freight transportation services, consisting of intermodal, truck brokerage and logistics, primarily through agents entering into contractual arrangements with Mode Transportation, LLC (Mode LLC). The Mode segment also operates a temperature protected services division. The Hub segment provides intermodal, truck brokerage and logistics services through a network of operating centers throughout the United States, Canada and Mexico. The Hub segment services customers in a range of industries, including consumer products, retail and durable goods. It operates through a network of operating centers and independent business owners. The Company also provides drayage services with its own drayage operations.

About Covenant Transportation Group

Covenant Transportation Group, Inc. is a provider of expedited long haul freight transportation, primarily using two-person driver teams in transcontinental lanes. The Company’s services also include refrigerated, dedicated, cross-border, regional and brokerage. The Company’s segments include Truckload and Other. The Truckload segment includes the operations of Covenant Transport, Inc. (Covenant Transport), its flagship operation, which provides expedited long haul, dedicated, temperature-controlled and regional solo-driver service; Southern Refrigerated Transport, Inc. (SRT), which provides primarily long haul, regional, dedicated and intermodal temperature-controlled service, and Star Transportation, Inc. (Star), which provides regional solo-driver and dedicated services, primarily in the southeastern United States. The Company provides truckload transportation services throughout the continental United States, into and out of Mexico, and into and out of portions of Canada.

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