Analyzing ArcBest (ARCB) & Werner Enterprises (WERN)

ArcBest (NASDAQ: ARCB) and Werner Enterprises (NASDAQ:WERN) are both transportation companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

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

Net Margins Return on Equity Return on Assets
ArcBest 2.68% 7.79% 3.67%
Werner Enterprises 9.86% 9.30% 5.85%

Risk and Volatility

ArcBest has a beta of 1.7, indicating that its stock price is 70% more volatile than the S&P 500. Comparatively, Werner Enterprises has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Dividends

ArcBest pays an annual dividend of $0.32 per share and has a dividend yield of 0.7%. Werner Enterprises pays an annual dividend of $0.28 per share and has a dividend yield of 0.7%. ArcBest pays out 24.1% of its earnings in the form of a dividend. Werner Enterprises pays out 22.0% 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. Werner Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares ArcBest and Werner Enterprises’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ArcBest $2.83 billion 0.41 $59.72 million $1.33 34.36
Werner Enterprises $2.12 billion 1.28 $202.88 million $1.27 29.57

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

Institutional & Insider Ownership

90.2% of ArcBest shares are owned by institutional investors. Comparatively, 68.4% of Werner Enterprises shares are owned by institutional investors. 1.0% of ArcBest shares are owned by insiders. Comparatively, 34.5% of Werner Enterprises shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for ArcBest and Werner Enterprises, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ArcBest 0 9 0 0 2.00
Werner Enterprises 2 6 6 0 2.29

ArcBest presently has a consensus price target of $34.88, suggesting a potential downside of 23.69%. Werner Enterprises has a consensus price target of $41.23, suggesting a potential upside of 9.80%. Given Werner Enterprises’ stronger consensus rating and higher probable upside, analysts clearly believe Werner Enterprises is more favorable than ArcBest.

Summary

Werner Enterprises beats ArcBest on 11 of the 16 factors compared between the two stocks.

ArcBest Company Profile

ArcBest Corporation provides freight transportation services and integrated logistics solutions worldwide. It operates through three segments: Asset-Based, ArcBest, and FleetNet. The Asset-Based segment transports general commodities, such as food, textiles, apparel, furniture, appliances, chemicals, nonbulk petroleum products, rubber, plastics, metal and metal products, wood, glass, automotive parts, machinery, and miscellaneous manufactured products through less-than-truckload services. This segment also offers motor carrier freight transportation services to customers in Mexico through arrangements with trucking companies. The ArcBest segment provides expedite freight transportation services to commercial and government customers; premium logistics services, such as deployment of specialized equipment to meet line haul requirements; and international freight transportation with air, ocean, and ground services. This segment also offers third-party transportation brokerage services by sourcing various capacity solutions, including dry van over the road and intermodal, temperature-controlled and refrigerated, flatbed, intermodal or container shipping, and specialized equipment; full-container and less-than-container load ocean transportation services; warehousing and distribution services; managed transportation services; and moving services to ?do-it-yourself' consumer and corporate account employee relocations, as well as provides final mile, time critical, product launch, warehousing, retail logistics, supply chain optimization, and trade show shipping services. The FleetNet segment provides roadside assistance and maintenance management services for commercial vehicles through third-party service providers. The company was formerly known as Arkansas Best Corporation and changed its name to ArcBest Corporation in May 2014. ArcBest Corporation was founded in 1923 and is headquartered in Fort Smith, Arkansas.

Werner Enterprises Company Profile

Werner Enterprises, Inc., a transportation and logistics company, engages in transporting truckload shipments of general commodities in interstate and intrastate commerce in the United States, Mexico, Canada, China, and Australia. It operates through two segments, Truckload Transportation Services and Werner Logistics. The Truckload Transportation Services segment operates medium-to-long-haul van fleet, which transports various consumer nondurable products and other commodities in truckload quantities using dry van trailers; the expedited fleet that offers time-sensitive truckload services using driver teams; and regional short-haul fleet, which provides comparable truckload van service in the United States. This segment also offers truckload services dedicated to a specific customer, including services for products requiring specialized trailers, such as temperature-controlled trailers. It transports retail store merchandise, consumer products, grocery products, and manufactured products. The Werner Logistics segment provides non-asset-based transportation and logistics services, including truck brokerage; logistics management services and solutions; rail transportation through alliances with rail and drayage providers; and management of shipments from origin to destination using a combination of air, ocean, truck, and rail transportation modes. As of December 31, 2017, the company had a fleet of 7,435 trucks, which included 6,805 company-operated, as well as 630 owned and operated by independent contractors; 24,500 company-owned trailers that comprised dry vans, flatbeds, temperature-controlled trailers, and other specialized trailers; and 45 intermodal drayage trucks. Werner Enterprises, Inc. was founded in 1956 and is headquartered in Omaha, Nebraska.

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