YRC Worldwide (YRCW) & Universal Logistics (ULH) Financial Analysis

YRC Worldwide (NASDAQ: ULH) and Universal Logistics (NASDAQ:ULH) are both small-cap transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, profitability, institutional ownership, valuation, earnings and analyst recommendations.

Volatility and Risk

YRC Worldwide has a beta of 3.6, meaning that its share price is 260% more volatile than the S&P 500. Comparatively, Universal Logistics has a beta of 1.46, meaning that its share price is 46% more volatile than the S&P 500.

Earnings and Valuation

This table compares YRC Worldwide and Universal Logistics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
YRC Worldwide $4.89 billion 0.07 -$10.80 million $0.15 65.20
Universal Logistics $1.22 billion 0.83 $28.15 million $0.73 48.90

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

Analyst Recommendations

This is a breakdown of recent ratings for YRC Worldwide and Universal Logistics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
YRC Worldwide 0 1 4 0 2.80
Universal Logistics 0 2 0 0 2.00

YRC Worldwide currently has a consensus target price of $16.75, indicating a potential upside of 71.27%. Universal Logistics has a consensus target price of $34.00, indicating a potential downside of 4.76%. Given YRC Worldwide’s stronger consensus rating and higher possible upside, analysts clearly believe YRC Worldwide is more favorable than Universal Logistics.

Dividends

Universal Logistics pays an annual dividend of $0.42 per share and has a dividend yield of 1.2%. YRC Worldwide does not pay a dividend. Universal Logistics pays out 57.5% of its earnings in the form of a dividend.

Insider & Institutional Ownership

78.2% of YRC Worldwide shares are owned by institutional investors. Comparatively, 26.6% of Universal Logistics shares are owned by institutional investors. 4.7% of YRC Worldwide shares are owned by insiders. Comparatively, 71.0% of Universal Logistics shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares YRC Worldwide and Universal Logistics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
YRC Worldwide -0.09% -2.36% 0.53%
Universal Logistics 3.70% 24.39% 6.54%

YRC Worldwide Company Profile

YRC Worldwide Inc., through its subsidiaries, provides various transportation services primarily in North America. Its YRC Freight segment offers various services to transport industrial, commercial, and retail goods; and provides specialized services, including guaranteed expedited services, time-specific deliveries, cross-border services, coast-to-coast air delivery, product returns, temperature-sensitive shipment protection, and government material shipments. It serves manufacturing, wholesale, retail, and government customers. As of December 31, 2017, this segment had a fleet of approximately 7,600 tractors comprising 5,900 owned and 1,700 leased; and 30,900 trailers consisting of 23,800 owned and 7,100 leased. The company's Regional Transportation segment provides regional delivery services, which include next-day local area delivery and second-day services, consolidation/distribution services, protect-from-freezing and hazardous materials handling, truck loading, and other specialized offerings; guaranteed and expedited delivery services consisting of day-definite, hour-definite, and time definite capabilities; interregional delivery services; and cross-border delivery services, as well as operates hollandregional.com, newpenn.com, and reddawayregional.com, which are e-commerce Websites offering online resources to manage transportation activities. This segment had a fleet of approximately 6,500 tractors, including 4,700 owned and 1,800 leased; and 13,700 trailers comprising 10,500 owned and 3,200 leased. The company was formerly known as Yellow Roadway Corporation and changed its name to YRC Worldwide Inc. in January 2006. YRC Worldwide Inc. was founded in 1924 and is headquartered in Overland Park, Kansas.

Universal Logistics Company Profile

Universal Logistics Holdings, Inc. provides transportation and logistics solutions in the United States, Mexico, Canada, and Colombia. It offers transportation services including dry van, flatbed, heavy haul, and refrigerated services; domestic and international freight forwarding and customs brokerage services; and final mile and ground expedite services. The company transports various commodities comprising automotive parts, machinery, building materials, paper, food, consumer goods, furniture, steel, and other metals. It also offers value-added services for customer requirements, including material handling, consolidation, sequencing, sub-assembly, cross-dock services, kitting, repacking, warehousing, and returnable container management; and intermodal support services comprising short-to-medium distance delivery of rail and steamship containers between the railhead or port, and the customer and drayage services. Universal Logistics Holdings, Inc. serves automotive, steel, oil and gas, alternative energy, and manufacturing industries, as well as other transportation companies who aggregate loads from various shippers. The company was formerly known as Universal Truckload Services, Inc. and changed its name to Universal Logistics Holdings, Inc. in April 2016. Universal Logistics Holdings, Inc. was founded in 1981 and is headquartered in Warren, Michigan.

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