Financial Contrast: Heartland Express (NASDAQ:HTLD) and Union Pacific (NYSE:UNP)
by Michael Walen · The Markets DailyUnion Pacific (NYSE:UNP – Get Free Report) and Heartland Express (NASDAQ:HTLD – Get Free Report) are both industrials companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.
Profitability
This table compares Union Pacific and Heartland Express’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Union Pacific | 28.85% | 38.46% | 10.45% |
| Heartland Express | -2.98% | -0.92% | -0.58% |
Volatility and Risk
Union Pacific has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500. Comparatively, Heartland Express has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.
Valuation & Earnings
This table compares Union Pacific and Heartland Express”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Union Pacific | $25.41 billion | 6.76 | $7.14 billion | $12.35 | 23.40 |
| Heartland Express | $736.28 million | 1.15 | -$52.45 million | ($0.28) | -39.11 |
Union Pacific has higher revenue and earnings than Heartland Express. Heartland Express is trading at a lower price-to-earnings ratio than Union Pacific, indicating that it is currently the more affordable of the two stocks.
Analyst Ratings
This is a breakdown of current recommendations for Union Pacific and Heartland Express, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Union Pacific | 0 | 4 | 15 | 2 | 2.90 |
| Heartland Express | 3 | 3 | 1 | 0 | 1.71 |
Union Pacific currently has a consensus target price of $325.00, indicating a potential upside of 12.47%. Heartland Express has a consensus target price of $13.00, indicating a potential upside of 18.72%. Given Heartland Express’ higher probable upside, analysts clearly believe Heartland Express is more favorable than Union Pacific.
Insider and Institutional Ownership
80.4% of Union Pacific shares are held by institutional investors. Comparatively, 53.5% of Heartland Express shares are held by institutional investors. 0.2% of Union Pacific shares are held by company insiders. Comparatively, 41.6% of Heartland Express shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Dividends
Union Pacific pays an annual dividend of $5.68 per share and has a dividend yield of 2.0%. Heartland Express pays an annual dividend of $0.08 per share and has a dividend yield of 0.7%. Union Pacific pays out 46.0% of its earnings in the form of a dividend. Heartland Express pays out -28.6% 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. Union Pacific has increased its dividend for 18 consecutive years. Union Pacific is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Union Pacific beats Heartland Express on 14 of the 18 factors compared between the two stocks.
About Union Pacific
Union Pacific Corporation, through its subsidiary, Union Pacific Railroad Company, operates in the railroad business in the United States. The company offers transportation services for grain and grain products, fertilizers, food and refrigerated products, and coal and renewables to grain processors, animal feeders, ethanol producers, renewable biofuel producers, and other agricultural users; and construction products, industrial chemicals, plastics, forest products, specialized products, metals and ores, petroleum, liquid petroleum gases, soda ash, and sand, as well as finished automobiles, automotive parts, and merchandise in intermodal containers. Union Pacific Corporation was founded in 1862 and is headquartered in Omaha, Nebraska.
About Heartland Express
Heartland Express, Inc., together with its subsidiaries, operates as a short-to-medium, and long-haul truckload carrier in the United States and Canada. It primarily provides nationwide asset-based dry van truckload service for shippers; cross-border freight and other transportation services; and temperature-controlled truckload services. The company offers its services under the Heartland Express and Millis Transfer brand names. It primarily serves retailers and manufacturers in consumer goods, appliances, food products, and automotive industries. The company was founded in 1978 and is headquartered in North Liberty, Iowa.