Critical Analysis: FRP Holdings (FRPH) and Werner Enterprises (WERN)

FRP Holdings (NASDAQ: FRPH) and Werner Enterprises (NASDAQ:WERN) are both finance companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, valuation, institutional ownership, earnings, profitability, dividends and analyst recommendations.

Insider & Institutional Ownership

45.5% of FRP Holdings shares are owned by institutional investors. Comparatively, 64.1% of Werner Enterprises shares are owned by institutional investors. 23.3% of FRP Holdings shares are owned by insiders. Comparatively, 34.7% of Werner Enterprises shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and price targets for FRP Holdings and Werner Enterprises, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
FRP Holdings 0 0 0 0 N/A
Werner Enterprises 1 9 3 0 2.15

Werner Enterprises has a consensus target price of $32.45, indicating a potential downside of 9.09%. Given Werner Enterprises’ higher probable upside, analysts clearly believe Werner Enterprises is more favorable than FRP Holdings.

Valuation & Earnings

This table compares FRP Holdings and Werner Enterprises’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
FRP Holdings $32.09 million 13.70 $21.12 million $0.68 64.63
Werner Enterprises $2.05 billion 1.26 $334.48 million $1.10 32.45

Werner Enterprises has higher revenue and earnings than FRP Holdings. Werner Enterprises is trading at a lower price-to-earnings ratio than FRP Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares FRP Holdings and Werner Enterprises’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
FRP Holdings 17.90% 3.40% 2.53%
Werner Enterprises 3.90% 7.97% 4.57%

Dividends

Werner Enterprises pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. FRP Holdings does not pay a dividend. Werner Enterprises pays out 25.5% of its earnings in the form of a dividend.

Risk and Volatility

FRP Holdings has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Werner Enterprises has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Summary

Werner Enterprises beats FRP Holdings on 11 of the 15 factors compared between the two stocks.

FRP Holdings Company Profile

FRP Holdings, Inc. is a holding company engaged in various real estate businesses. The Company conducts its business through its subsidiaries, FRP Maryland, Inc., FRP Development Corp. and Florida Rock Properties, Inc. The segments of the Company include leasing and management of warehouse and office building owned by the Company (the Asset Management Segment), leasing and management of mining royalty land owned by the Company (the Mining Royalty Lands Segment) and real property acquisition, entitlement, development and construction primarily for warehouse and office buildings (the Land Development and Construction Segment). The Company’s Asset Management Segment owns leases and manages warehouse and office buildings. Its Mining Royalty Lands Segment owns several properties comprising approximately 15,000 acres under lease for mining rents or royalties. Its Land Development and Construction Segment owns and monitors the parcels of land that are in various stages of development.

Werner Enterprises Company Profile

Werner Enterprises, Inc. is a transportation and logistics company. The Company is engaged in transporting truckload shipments of general commodities in both interstate and intrastate commerce. It operates through two segments: Truckload and Werner Logistics. It provides logistics services through its Werner Logistics division. As of December 31, 2016, it had a fleet of approximately 7,100 trucks, of which 6,305 were company-operated and 795 were owned and operated by independent contractors. Its Werner Logistics division operated 74 intermodal drayage trucks as of December 31, 2016. Its Truckload segment comprises the One-Way Truckload and Specialized Services units. It operates in several provinces of Canada to provide through-trailer service into and out of Mexico. Its Werner Logistic segment is a non-asset-based transportation and logistics provider and comprises four operating units: truck brokerage, freight management, the intermodal and Werner Global Logistics international.

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