ArcBest Corporation (NASDAQ: ARCB) and Covenant Transportation Group (NASDAQ:CVTI) are both small-cap transportation companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, dividends, valuation, analyst recommendations, profitabiliy, earnings and risk.
Insider & Institutional Ownership
87.2% of ArcBest Corporation shares are owned by institutional investors. Comparatively, 63.2% of Covenant Transportation Group shares are owned by institutional investors. 1.0% of ArcBest Corporation shares are owned by insiders. Comparatively, 35.4% of Covenant Transportation Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares ArcBest Corporation and Covenant Transportation Group’s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | EBITDA | Earnings Per Share | Price/Earnings Ratio | |
| ArcBest Corporation | $2.73 billion | 0.26 | $136.29 million | $0.65 | 41.46 |
| Covenant Transportation Group | $673.05 million | 0.51 | $99.02 million | $0.60 | 31.03 |
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.
Dividends
ArcBest Corporation pays an annual dividend of $0.32 per share and has a dividend yield of 1.2%. Covenant Transportation Group does not pay a dividend. ArcBest Corporation pays out 49.2% of its earnings in the form of a dividend.
Volatility and Risk
ArcBest Corporation has a beta of 1.56, indicating that its stock price is 56% more volatile than the S&P 500. Comparatively, Covenant Transportation Group has a beta of 1.66, indicating that its stock price is 66% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings for ArcBest Corporation and Covenant Transportation Group, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| ArcBest Corporation | 0 | 4 | 2 | 0 | 2.33 |
| Covenant Transportation Group | 0 | 3 | 1 | 0 | 2.25 |
ArcBest Corporation presently has a consensus price target of $24.00, indicating a potential downside of 10.95%. Covenant Transportation Group has a consensus price target of $21.00, indicating a potential upside of 12.78%. Given Covenant Transportation Group’s higher possible upside, analysts clearly believe Covenant Transportation Group is more favorable than ArcBest Corporation.
Profitability
This table compares ArcBest Corporation and Covenant Transportation Group’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| ArcBest Corporation | 0.64% | 4.14% | 1.90% |
| Covenant Transportation Group | 1.60% | 4.68% | 1.78% |
ArcBest Corporation Company Profile
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.
Covenant Transportation Group Company Profile
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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