Analyzing Roadrunner Transportation Systems (RRTS) & Core-Mark Holding (CORE)

Core-Mark Holding (NASDAQ: CORE) and Roadrunner Transportation Systems (NYSE:RRTS) are both small-cap business services companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, valuation, analyst recommendations, risk, institutional ownership and dividends.

Valuation & Earnings

This table compares Core-Mark Holding and Roadrunner Transportation Systems’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Core-Mark Holding $11.83 billion 0.10 $117.80 million $0.90 29.46
Roadrunner Transportation Systems $1.97 billion 0.13 $100.85 million $0.66 10.35

Core-Mark Holding has higher revenue and earnings than Roadrunner Transportation Systems. Roadrunner Transportation Systems is trading at a lower price-to-earnings ratio than Core-Mark Holding, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Core-Mark Holding and Roadrunner Transportation Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Core-Mark Holding 0.27% 9.70% 3.56%
Roadrunner Transportation Systems N/A N/A N/A

Dividends

Core-Mark Holding pays an annual dividend of $0.36 per share and has a dividend yield of 1.4%. Roadrunner Transportation Systems does not pay a dividend. Core-Mark Holding pays out 40.0% of its earnings in the form of a dividend.

Institutional and Insider Ownership

98.3% of Core-Mark Holding shares are held by institutional investors. Comparatively, 74.9% of Roadrunner Transportation Systems shares are held by institutional investors. 2.4% of Core-Mark Holding shares are held by company insiders. Comparatively, 25.8% of Roadrunner Transportation Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Core-Mark Holding has a beta of 0.87, meaning that its share price is 13% less volatile than the S&P 500. Comparatively, Roadrunner Transportation Systems has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings for Core-Mark Holding and Roadrunner Transportation Systems, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Core-Mark Holding 0 1 3 0 2.75
Roadrunner Transportation Systems 0 2 1 0 2.33

Core-Mark Holding currently has a consensus price target of $39.50, suggesting a potential upside of 49.00%. Roadrunner Transportation Systems has a consensus price target of $9.67, suggesting a potential upside of 41.53%. Given Core-Mark Holding’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Core-Mark Holding is more favorable than Roadrunner Transportation Systems.

Summary

Core-Mark Holding beats Roadrunner Transportation Systems on 13 of the 16 factors compared between the two stocks.

Core-Mark Holding Company Profile

Core-Mark Holding Company, Inc. is a wholesale distributor to the convenience retail industry in North America. The Company provides sales, marketing, distribution and logistics services. As of December 31, 2016, the Company offered services to over 43,000 customer locations across the United States and Canada through 30 distribution centers. The Company’s segments include the United States, Canada and Corporate. The Company’s primary customer base consists of traditional convenience stores, as well as alternative outlets selling consumer packaged goods. The Company’s traditional convenience store customers include various national and super-regional convenience store operators, as well as independently owned convenience stores. Its alternative outlet customers include a range of store formats, including grocery stores, drug stores, liquor stores, cigarette and tobacco shops, hotel gift shops, military exchanges, college and corporate campuses, casinos and hardware stores.

Roadrunner Transportation Systems Company Profile

Roadrunner Transportation Systems, Inc. (RRTS) is an asset-light transportation and logistics service provider. The Company offers a suite of global supply chain solutions, including truckload logistics (TL), customized and expedited less-than-truckload (LTL), intermodal solutions (transporting a shipment by over one mode, primarily through rail and truck), freight consolidation, inventory management, expedited services, air freight, international freight forwarding, customs brokerage and transportation management solutions. The Company operates through three segments: Truckload Logistics, Less-than-Truckload and Global Solutions. The Company utilizes a third-party network of transportation providers, consisting of independent contractors (ICs) and purchased power providers, to serve a diverse customer base. It primarily focuses on small to mid-size shippers.

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