Covenant Transportation Group (NASDAQ: CVTI) and ArcBest Corporation (NASDAQ:ARCB) are both small-cap transportation companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitabiliy, earnings, dividends, institutional ownership, analyst recommendations and valuation.
Earnings & Valuation
This table compares Covenant Transportation Group and ArcBest Corporation’s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| Covenant Transportation Group | $673.05 million | 0.45 | $99.02 million | $0.72 | 23.24 |
| ArcBest Corporation | $2.73 billion | 0.21 | $136.29 million | $0.65 | 33.85 |
ArcBest Corporation has higher revenue and earnings than Covenant Transportation Group. Covenant Transportation Group is trading at a lower price-to-earnings ratio than ArcBest Corporation, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
63.1% of Covenant Transportation Group shares are held by institutional investors. Comparatively, 87.4% of ArcBest Corporation shares are held by institutional investors. 35.4% of Covenant Transportation Group shares are held by company insiders. Comparatively, 1.0% of ArcBest Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Covenant Transportation Group has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, ArcBest Corporation has a beta of 1.56, suggesting that its stock price is 56% more volatile than the S&P 500.
Dividends
ArcBest Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 1.5%. Covenant Transportation Group does not pay a dividend. ArcBest Corporation pays out 49.2% of its earnings in the form of a dividend.
Profitability
This table compares Covenant Transportation Group and ArcBest Corporation’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Covenant Transportation Group | 1.92% | 5.65% | 2.14% |
| ArcBest Corporation | 0.64% | 4.14% | 1.90% |
Analyst Ratings
This is a breakdown of recent ratings for Covenant Transportation Group and ArcBest Corporation, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Covenant Transportation Group | 0 | 3 | 1 | 0 | 2.25 |
| ArcBest Corporation | 0 | 4 | 2 | 0 | 2.33 |
Covenant Transportation Group currently has a consensus price target of $21.00, suggesting a potential upside of 25.52%. ArcBest Corporation has a consensus price target of $24.00, suggesting a potential upside of 9.09%. Given Covenant Transportation Group’s higher possible upside, research analysts plainly believe Covenant Transportation Group is more favorable than ArcBest Corporation.
Summary
Covenant Transportation Group beats ArcBest Corporation on 9 of the 16 factors compared between the two stocks.
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.
About ArcBest Corporation
ArcBest Corporation is a holding company of businesses providing integrated logistics solutions. The Company operates through three segments: Asset-Based, which consists of ABF Freight System, Inc. and other subsidiaries; ArcBest, which represents the consolidation of the operations of the Premium Logistics, Transportation Management and Household Goods Moving Services segments, and FleetNet, which includes the results of operations of FleetNet America, Inc. (FleetNet). Its Asset-Based operations offer transportation of general commodities through standard, time-critical, expedited and guaranteed LTL services-nationally and regionally. Its ArcBest segment includes truckload, expedite, international, warehousing, freight transportation, management services and moving services. Its FleetNet segment provides roadside assistance and maintenance management services for commercial vehicles to customers in the United States and Canada through a network of third-party service providers.
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