Financial Analysis: Forward Air (FWRD) & C.H. Robinson Worldwide (CHRW)

Forward Air (NASDAQ: FWRD) and C.H. Robinson Worldwide (NASDAQ:CHRW) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, earnings, valuation, institutional ownership, dividends, analyst recommendations and profitability.

Earnings & Valuation

This table compares Forward Air and C.H. Robinson Worldwide’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Forward Air $1.10 billion 1.62 $87.32 million $2.36 25.64
C.H. Robinson Worldwide $14.87 billion 0.85 $504.89 million $3.48 25.96

C.H. Robinson Worldwide has higher revenue and earnings than Forward Air. Forward Air is trading at a lower price-to-earnings ratio than C.H. Robinson Worldwide, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

95.9% of Forward Air shares are owned by institutional investors. Comparatively, 90.5% of C.H. Robinson Worldwide shares are owned by institutional investors. 2.0% of Forward Air shares are owned by insiders. Comparatively, 1.0% of C.H. Robinson Worldwide shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for Forward Air and C.H. Robinson Worldwide, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Forward Air 0 3 3 0 2.50
C.H. Robinson Worldwide 3 8 7 0 2.22

Forward Air currently has a consensus target price of $63.00, suggesting a potential upside of 4.13%. C.H. Robinson Worldwide has a consensus target price of $83.33, suggesting a potential downside of 7.75%. Given Forward Air’s stronger consensus rating and higher possible upside, research analysts plainly believe Forward Air is more favorable than C.H. Robinson Worldwide.

Dividends

Forward Air pays an annual dividend of $0.60 per share and has a dividend yield of 1.0%. C.H. Robinson Worldwide pays an annual dividend of $1.84 per share and has a dividend yield of 2.0%. Forward Air pays out 25.4% of its earnings in the form of a dividend. C.H. Robinson Worldwide pays out 52.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. C.H. Robinson Worldwide has raised its dividend for 11 consecutive years. C.H. Robinson Worldwide is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Forward Air and C.H. Robinson Worldwide’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Forward Air 7.85% 14.41% 11.10%
C.H. Robinson Worldwide 3.41% 36.63% 12.30%

Volatility and Risk

Forward Air has a beta of 1.27, suggesting that its stock price is 27% more volatile than the S&P 500. Comparatively, C.H. Robinson Worldwide has a beta of 0.42, suggesting that its stock price is 58% less volatile than the S&P 500.

Summary

C.H. Robinson Worldwide beats Forward Air on 9 of the 17 factors compared between the two stocks.

Forward Air Company Profile

Forward Air Corporation, together with its subsidiaries, operates as an asset-light freight and logistics company in the United State and Canada. The company operates through four segments: Expedited Less-than-truckload (LTL), Truckload Premium Services (TLS), Intermodal, and Pool Distribution (Pool). The Expedited LTL segment provides expedited regional, inter-regional, and national LTL services, as well as local pick-up and delivery services. It also offers shipment consolidation and deconsolidation, warehousing, customs brokerage, and other handling services. This segment provides its transportation services through a network of terminals located at or near airports. The TLS segment offers expedited truckload brokerage, dedicated fleet, and high security and temperature-controlled logistics services. The Intermodal segment provides intermodal container drayage services; and contract, and container freight station warehouse and handling services. The Pool segment offers high-frequency handling and distribution of time-sensitive products to various destinations. Forward Air Corporation was founded in 1981 and is headquartered in Greeneville, Tennessee.

C.H. Robinson Worldwide Company Profile

C.H. Robinson Worldwide, Inc., a third party logistics company, provides freight transportation services and logistics solutions to companies in various industries worldwide. The company operates through three segments: North American Surface Transportation, Global Forwarding, and Robinson Fresh. It offers transportation and logistics services, such as truckload; less than truckload transportation which include the shipment of single or multiple pallets of freight; intermodal transportation, which is shipment service of freight in trailers or containers by a combination of truck and rail; and non-vessel ocean common carrier or freight forwarding services, as well as organizes air shipments and provides door-to-door services. The company also provides custom broker services; and other logistics services, including fee-based managed, warehousing, small parcel, and other services. It has contractual relationships with approximately 73,000 transportation companies, including motor carriers, railroads, air freight, and ocean carriers. In addition, the company is involved in buying, selling, and marketing of fresh produce, including fresh fruits, vegetables, and other perishable items. Further, it provides transportation management services or managed TMS; and other surface transportation services outside of North America. The company offers its fresh produce to grocery retailers, restaurants, produce wholesalers, and foodservice distributors through a network of independent produce growers and suppliers. C.H. Robinson Worldwide, Inc. was founded in 1905 and is headquartered in Eden Prairie, Minnesota.

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