Analyzing Hub Group (HUBG) & Forward Air (FWRD)

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

Analyst Ratings

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This is a breakdown of recent ratings and target prices for Forward Air and Hub Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Forward Air 0 4 2 0 2.33
Hub Group 1 9 2 0 2.08

Forward Air currently has a consensus price target of $60.00, suggesting a potential upside of 12.44%. Hub Group has a consensus price target of $47.09, suggesting a potential upside of 19.67%. Given Hub Group’s higher probable upside, analysts plainly believe Hub Group is more favorable than Forward Air.

Insider & Institutional Ownership

98.4% of Forward Air shares are held by institutional investors. Comparatively, 92.9% of Hub Group shares are held by institutional investors. 2.4% of Forward Air shares are held by insiders. Comparatively, 5.4% of Hub Group shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Forward Air pays an annual dividend of $0.60 per share and has a dividend yield of 1.1%. Hub Group does not pay a dividend. Forward Air pays out 25.4% of its earnings in the form of a dividend.

Profitability

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

Net Margins Return on Equity Return on Assets
Forward Air 7.93% 13.91% 10.80%
Hub Group 3.35% 9.36% 4.27%

Earnings and Valuation

This table compares Forward Air and Hub Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Forward Air $1.10 billion 1.43 $87.32 million $2.36 22.61
Hub Group $4.03 billion 0.34 $135.15 million $1.91 20.60

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

Volatility & Risk

Forward Air has a beta of 1.25, indicating that its stock price is 25% more volatile than the S&P 500. Comparatively, Hub Group has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.

Summary

Forward Air beats Hub Group on 9 of the 15 factors compared between the two stocks.

About Forward Air

Forward Air Corporation, together with its subsidiaries, operates as an asset-light freight and logistics company in the United State and Canada. The company operates through four segments: Expedited Less-than-truckload (LTL), Truckload Premium Services (TLS), Intermodal, and Pool Distribution (Pool). The Expedited LTL segment provides expedited regional, inter-regional, and national LTL services, as well as local pick-up and delivery services. It also offers shipment consolidation and deconsolidation, warehousing, customs brokerage, and other handling services. This segment provides its transportation services through a network of terminals located at or near airports. The TLS segment offers expedited truckload brokerage, dedicated fleet, and high security and temperature-controlled logistics services. The Intermodal segment provides intermodal container drayage services; and contract, and container freight station warehouse and handling services. The Pool segment offers high-frequency handling and distribution of time-sensitive products to various destinations. Forward Air Corporation was founded in 1981 and is headquartered in Greeneville, Tennessee.

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.

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