Reviewing XPO Logistics (XPO) & Norfolk Souther Corporation (NSC)

XPO Logistics (NYSE: XPO) and Norfolk Souther Corporation (NYSE:NSC) are both mid-cap transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.

Dividends

Norfolk Souther Corporation pays an annual dividend of $2.44 per share and has a dividend yield of 2.1%. XPO Logistics does not pay a dividend. Norfolk Souther Corporation pays out 39.6% of its earnings in the form of a dividend. XPO Logistics has raised its dividend for 7 consecutive years.

Insider & Institutional Ownership

91.1% of XPO Logistics shares are held by institutional investors. Comparatively, 70.5% of Norfolk Souther Corporation shares are held by institutional investors. 16.9% of XPO Logistics shares are held by insiders. Comparatively, 0.4% of Norfolk Souther Corporation 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.

Valuation and Earnings

This table compares XPO Logistics and Norfolk Souther Corporation’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	EBITDA	Earnings Per Share	Price/Earnings Ratio
XPO Logistics	$14.69 billion	0.47	$1.20 billion	$0.87	67.20
Norfolk Souther Corporation	$10.23 billion	3.33	$4.29 billion	$6.16	19.19

Norfolk Souther Corporation has higher revenue, but lower earnings than XPO Logistics. Norfolk Souther Corporation is trading at a lower price-to-earnings ratio than XPO Logistics, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for XPO Logistics and Norfolk Souther Corporation, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
XPO Logistics	0	1	16	0	2.94
Norfolk Souther Corporation	3	14	7	0	2.17

XPO Logistics presently has a consensus target price of $66.36, indicating a potential upside of 13.51%. Norfolk Souther Corporation has a consensus target price of $109.53, indicating a potential downside of 7.34%. Given XPO Logistics’ stronger consensus rating and higher probable upside, research analysts clearly believe XPO Logistics is more favorable than Norfolk Souther Corporation.

Profitability

This table compares XPO Logistics and Norfolk Souther Corporation’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
XPO Logistics	0.80%	6.49%	1.67%
Norfolk Souther Corporation	17.66%	14.45%	5.18%

Risk & Volatility

XPO Logistics has a beta of 2.31, meaning that its stock price is 131% more volatile than the S&P 500. Comparatively, Norfolk Souther Corporation has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.

Summary

XPO Logistics beats Norfolk Souther Corporation on 10 of the 17 factors compared between the two stocks.

XPO Logistics Company Profile

XPO Logistics, Inc. is a global provider of supply chain solutions. The Company operates in two segments: Transportation and Logistics. The Transportation segment provides freight brokerage, last mile, less-than-truckload (LTL), full truckload and global forwarding services. The Logistics segment provides a range of contract logistics services, including highly engineered and customized solutions, value-added warehousing and distribution, cold chain solutions and other inventory solutions. Its freight brokerage operations encompass truck brokerage globally, as well as intermodal, drayage and expedite services in North America. In Logistics segment, it provides warehousing and distribution solutions, such as factory support, aftermarket support, integrated manufacturing, packaging, labeling and transportation. As of December 31, 2016, the Company had more than 10,000 independent owner operators under contract to provide drayage, expedite, last mile and LTL services to its customers.

Norfolk Souther Corporation Company Profile

Norfolk Southern Corporation is a holding company engaged in the rail transportation business. As of December 31, 2016, the Company operated approximately 19,500 miles of road primarily in the East and Midwest. The Company is engaged in the rail transportation of raw materials, intermediate products and finished goods primarily in the Southeast, East and Midwest. The Company, through interchange with rail carriers, to and from the rest of the United States. The Company also transports overseas freight through various Atlantic and Gulf Coast ports. It provides logistics services and offers the intermodal network in the eastern half of the United States. The Company’s system reaches various manufacturing plants, electric generating facilities, mines, distribution centers and other businesses located in its service area. The Company’s intermodal market group consists of shipments moving in trailers, domestic and international containers, and RoadRailer equipment.