Critical Analysis: USA Truck (USAK) and Covenant Transportation Group (CVTI)

USA Truck (NASDAQ: USAK) and Covenant Transportation Group (NASDAQ:CVTI) are both small-cap transportation companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, earnings, dividends, risk, institutional ownership, profitability and valuation.

Volatility and Risk

USA Truck has a beta of 1.88, indicating that its stock price is 88% more volatile than the S&P 500. Comparatively, Covenant Transportation Group has a beta of 1.63, indicating that its stock price is 63% more volatile than the S&P 500.

Institutional and Insider Ownership

71.1% of USA Truck shares are owned by institutional investors. Comparatively, 63.3% of Covenant Transportation Group shares are owned by institutional investors. 6.0% of USA Truck shares are owned by company insiders. Comparatively, 33.1% of Covenant Transportation Group shares are owned by company 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.

Profitability

This table compares USA Truck and Covenant Transportation Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
USA Truck 2.86% 2.66% 0.61%
Covenant Transportation Group 8.32% 7.34% 3.08%

Analyst Recommendations

This is a breakdown of current ratings and price targets for USA Truck and Covenant Transportation Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
USA Truck 0 0 3 0 3.00
Covenant Transportation Group 0 1 3 0 2.75

USA Truck presently has a consensus target price of $30.50, indicating a potential upside of 30.79%. Covenant Transportation Group has a consensus target price of $34.00, indicating a potential upside of 8.56%. Given USA Truck’s stronger consensus rating and higher possible upside, analysts plainly believe USA Truck is more favorable than Covenant Transportation Group.

Valuation & Earnings

This table compares USA Truck and Covenant Transportation Group’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
USA Truck $446.53 million 0.44 $7.49 million ($0.56) -41.64
Covenant Transportation Group $705.01 million 0.81 $55.43 million $0.84 37.29

Covenant Transportation Group has higher revenue and earnings than USA Truck. USA Truck is trading at a lower price-to-earnings ratio than Covenant Transportation Group, indicating that it is currently the more affordable of the two stocks.

Summary

Covenant Transportation Group beats USA Truck on 9 of the 13 factors compared between the two stocks.

USA Truck Company Profile

USA Truck, Inc., a truckload carrier, provides general commodities transportation services in the United States, Mexico, and Canada. It operates through two segments, Trucking and USAT Logistics. The Trucking segment offers truckload services as a medium to long-haul common carrier; and dedicated freight services. The USAT Logistics segment provides freight brokerage and rail intermodal services. As of December 31, 2017, the company's fleet consisted of 1,669 tractors, which included 247 independent contractor tractors; and 5,596 trailers. USA Truck, Inc. was founded in 1983 and is headquartered in Van Buren, Arkansas.

Covenant Transportation Group Company Profile

Covenant Transportation Group, Inc., together with its subsidiaries, provides truckload transportation and brokerage services primarily in the continental United States. It offers long haul, dedicated, temperature-controlled, and regional solo-driver services; long haul, regional, dedicated, and intermodal temperature-controlled services; and regional solo-driver and dedicated services. The company also provides ancillary services, including freight brokerage services and accounts receivable factoring. It serves transportation companies, such as freight forwarders, less-than-truckload carriers, and third-party logistics providers; and traditional truckload customers, including manufacturers, retailers, and food and beverage shippers. As of December 31, 2017, the company operated 2,559 tractors and 7,134 trailers. Covenant Transportation Group, Inc. was founded in 1986 and is headquartered in Chattanooga, Tennessee.

Receive News & Ratings for USA Truck Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for USA Truck and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply