Canadian National Railway (NYSE:CNI) and ZTO Express (Cayman) (NYSE:ZTO) are both large-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, earnings, valuation, dividends and analyst recommendations.
Analyst Recommendations
This is a summary of recent ratings and price targets for Canadian National Railway and ZTO Express (Cayman), as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Canadian National Railway | 0 | 15 | 6 | 0 | 2.29 |
| ZTO Express (Cayman) | 1 | 2 | 2 | 0 | 2.20 |
Canadian National Railway currently has a consensus price target of $118.35, suggesting a potential upside of 7.77%. ZTO Express (Cayman) has a consensus price target of $29.00, suggesting a potential downside of 17.05%. Given Canadian National Railway's stronger consensus rating and higher probable upside, research analysts clearly believe Canadian National Railway is more favorable than ZTO Express (Cayman).
Profitability
This table compares Canadian National Railway and ZTO Express (Cayman)'s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Canadian National Railway | 24.90% | 19.55% | 8.12% |
| ZTO Express (Cayman) | 24.38% | 13.35% | 11.02% |
Institutional & Insider Ownership
54.2% of Canadian National Railway shares are held by institutional investors. Comparatively, 38.2% of ZTO Express (Cayman) shares are held by institutional investors. 2.4% of Canadian National Railway shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares Canadian National Railway and ZTO Express (Cayman)'s top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Canadian National Railway | $11.30 billion | 6.94 | $3.18 billion | $4.39 | 25.16 |
| ZTO Express (Cayman) | $3.18 billion | 6.36 | $815.04 million | $0.97 | 35.93 |
Canadian National Railway has higher revenue and earnings than ZTO Express (Cayman). Canadian National Railway is trading at a lower price-to-earnings ratio than ZTO Express (Cayman), indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Canadian National Railway has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, ZTO Express (Cayman) has a beta of 0.33, suggesting that its share price is 67% less volatile than the S&P 500.
Summary
Canadian National Railway beats ZTO Express (Cayman) on 12 of the 14 factors compared between the two stocks.
