Head to Head Survey: Air Transport Services Group (ATSG) & XPO Logistics (XPO)

Air Transport Services Group (NASDAQ: ATSG) and XPO Logistics (NYSE:XPO) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitabiliy, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Insider and Institutional Ownership

87.3% of Air Transport Services Group shares are held by institutional investors. Comparatively, 93.2% of XPO Logistics shares are held by institutional investors. 2.2% of Air Transport Services Group shares are held by insiders. Comparatively, 17.0% of XPO Logistics shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings for Air Transport Services Group and XPO Logistics, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Air Transport Services Group 0 2 4 0 2.67
XPO Logistics 0 1 13 0 2.93

Air Transport Services Group presently has a consensus target price of $23.20, suggesting a potential upside of 3.20%. XPO Logistics has a consensus target price of $61.62, suggesting a potential downside of 2.23%. Given Air Transport Services Group’s higher probable upside, equities analysts clearly believe Air Transport Services Group is more favorable than XPO Logistics.

Earnings & Valuation

This table compares Air Transport Services Group and XPO Logistics’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Air Transport Services Group $829.40 million 1.61 $211.29 million $0.40 56.20
XPO Logistics $14.61 billion 0.48 $1.18 billion $0.84 75.02

XPO Logistics has higher revenue and earnings than Air Transport Services Group. Air Transport Services Group is trading at a lower price-to-earnings ratio than XPO Logistics, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Air Transport Services Group and XPO Logistics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Air Transport Services Group 3.05% 11.82% 3.25%
XPO Logistics 0.76% 5.63% 1.41%

Volatility and Risk

Air Transport Services Group has a beta of 1.94, meaning that its stock price is 94% more volatile than the S&P 500. Comparatively, XPO Logistics has a beta of 2.25, meaning that its stock price is 125% more volatile than the S&P 500.

Summary

XPO Logistics beats Air Transport Services Group on 9 of the 14 factors compared between the two stocks.

About Air Transport Services Group

Air Transport Services Group, Inc. (ATSG) is a holding company. The Company provides airline operations, aircraft leases, aircraft maintenance and other support services primarily to the cargo transportation and package delivery industries. It offers aircraft, crew, maintenance and insurance (ACMI) for specified cargo operations. Its segments include ACMI Services and CAM. Through its subsidiaries, it offers a range of complementary services to delivery companies, freight forwarders, airlines and government customers. Its leasing subsidiary, Cargo Aircraft Management, Inc. (CAM) leases cargo aircraft to its airlines, as well as to non-affiliated airlines and other lessees. Airborne Global Solutions, Inc. (AGS) is its subsidiary that assists the Company’s businesses in marketing plans and provides sales leads to its subsidiaries by identifying customers’ business and operational requirements. It owns two airlines, ABX Air, Inc. (ABX) and Air Transport International, Inc. (ATI).

About XPO Logistics

XPO Logistics, Inc. is a global provider of supply chain solutions. The Company operates in two segments: Transportation and Logistics. The Transportation segment provides freight brokerage, last mile, less-than-truckload (LTL), full truckload and global forwarding services. The Logistics segment provides a range of contract logistics services, including highly engineered and customized solutions, value-added warehousing and distribution, cold chain solutions and other inventory solutions. Its freight brokerage operations encompass truck brokerage globally, as well as intermodal, drayage and expedite services in North America. In Logistics segment, it provides warehousing and distribution solutions, such as factory support, aftermarket support, integrated manufacturing, packaging, labeling and transportation. As of December 31, 2016, the Company had more than 10,000 independent owner operators under contract to provide drayage, expedite, last mile and LTL services to its customers.

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