Forward Air (NASDAQ:FWRD) and Expeditors International of Washington (NASDAQ:EXPD) are both transportation companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, valuation, profitability, institutional ownership, dividends and analyst recommendations.
Risk & Volatility
Forward Air has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, Expeditors International of Washington has a beta of 0.82, suggesting that its stock price is 18% less volatile than the S&P 500.
Insider and Institutional Ownership
95.0% of Forward Air shares are owned by institutional investors. Comparatively, 91.1% of Expeditors International of Washington shares are owned by institutional investors. 1.5% of Forward Air shares are owned by company insiders. Comparatively, 1.2% of Expeditors International of Washington shares are owned 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 Forward Air and Expeditors International of Washington's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Forward Air | 3.91% | 10.39% | 5.63% |
| Expeditors International of Washington | 7.06% | 28.55% | 16.53% |
Dividends
Forward Air pays an annual dividend of $0.72 per share and has a dividend yield of 1.0%. Expeditors International of Washington pays an annual dividend of $1.04 per share and has a dividend yield of 1.2%. Forward Air pays out 23.7% of its earnings in the form of a dividend. Expeditors International of Washington pays out 30.1% 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. Forward Air has raised its dividend for 1 consecutive years and Expeditors International of Washington has raised its dividend for 26 consecutive years. Expeditors International of Washington is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Analyst Ratings
This is a summary of recent ratings and recommmendations for Forward Air and Expeditors International of Washington, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Forward Air | 0 | 2 | 1 | 0 | 2.33 |
| Expeditors International of Washington | 3 | 5 | 0 | 0 | 1.63 |
Forward Air currently has a consensus target price of $65.25, suggesting a potential downside of 13.28%. Expeditors International of Washington has a consensus target price of $79.4286, suggesting a potential downside of 12.04%. Given Expeditors International of Washington's higher probable upside, analysts clearly believe Expeditors International of Washington is more favorable than Forward Air.
Valuation and Earnings
This table compares Forward Air and Expeditors International of Washington's revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Forward Air | $1.41 billion | 1.47 | $87.10 million | $3.04 | 24.75 |
| Expeditors International of Washington | $8.18 billion | 1.87 | $590.40 million | $3.45 | 26.17 |
Expeditors International of Washington has higher revenue and earnings than Forward Air. Forward Air is trading at a lower price-to-earnings ratio than Expeditors International of Washington, indicating that it is currently the more affordable of the two stocks.
Summary
Expeditors International of Washington beats Forward Air on 10 of the 17 factors compared between the two stocks.
