Comparing Matson (NYSE:MATX) & REV Group (NYSE:REVG)

Matson (NYSE:MATX) and REV Group (NYSE:REVG) are both mid-cap transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, valuation, profitability, risk and dividends.

Dividends

Matson pays an annual dividend of $1.44 per share and has a dividend yield of 0.6%. REV Group pays an annual dividend of $0.24 per share and has a dividend yield of 0.4%. Matson pays out 10.6% of its earnings in the form of a dividend. REV Group pays out 12.6% 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. Matson has raised its dividend for 13 consecutive years and REV Group has raised its dividend for 1 consecutive years. Matson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

84.8% of Matson shares are owned by institutional investors. 2.5% of Matson shares are owned by insiders. Comparatively, 1.7% of REV Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Matson has a beta of 1.28, indicating that its share price is 28% more volatile than the S&P 500. Comparatively, REV Group has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Earnings & Valuation

This table compares Matson and REV Group”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Matson	$3.34 billion	2.01	$444.80 million	$13.61	16.32
REV Group	$2.46 billion	1.27	$95.20 million	$1.91	33.46

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

Profitability

This table compares Matson and REV Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Matson	12.92%	15.90%	9.38%
REV Group	3.86%	31.67%	10.30%

Analyst Recommendations

This is a breakdown of current ratings for Matson and REV Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Matson	0	3	3	0	2.50
REV Group	0	2	1	1	2.75

Matson currently has a consensus target price of $181.25, indicating a potential downside of 18.42%. REV Group has a consensus target price of $55.67, indicating a potential downside of 12.88%. Given REV Group’s stronger consensus rating and higher possible upside, analysts plainly believe REV Group is more favorable than Matson.

Summary

Matson beats REV Group on 12 of the 18 factors compared between the two stocks.

About Matson

Matson, Inc., together with its subsidiaries, engages in the provision of ocean transportation and logistics services. It operates through two segments, Ocean Transportation and Logistics. The Ocean Transportation segment offers ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Japan, Alaska, and Guam, as well as to other island economies in Micronesia. It primarily transports dry containers of mixed commodities, refrigerated commodities, food products, beverages, building materials, automobiles, and household goods; livestock; seafood; general sustenance cargo; and garments, footwear, e-commerce, and other retail merchandise. This segment also operates an expedited service from China to Long Beach, California, and various islands in the South Pacific, as well as Okinawa, Japan; and provides stevedoring, refrigerated cargo services, inland transportation, container equipment maintenance, and other terminal services to ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui, and Kauai, as well as in the Alaska locations of Anchorage, Kodiak, and Dutch Harbor. In addition, it offers vessel management and container transshipment services. The Logistics segment provides multimodal transportation brokerage services, including domestic and international rail intermodal, long-haul and regional highway trucking, specialized hauling, flat-bed and project, less-than-truckload, and expedited freight services; less-than-container load consolidation and freight forwarding services; warehousing and distribution services; supply chain management services, and non-vessel operating common carrier freight forwarding services. It serves the U.S. military, freight forwarders, retailers, consumer goods, automobile manufacturers, and other customers. The company was formerly known as Alexander & Baldwin Holdings, Inc. and changed its name to Matson, Inc. in June 2012. Matson, Inc. was founded in 1882 and is headquartered in Honolulu, Hawaii.

About REV Group

REV Group, Inc., together with its subsidiaries, designs, manufactures, and distributes specialty vehicles, and related aftermarket parts and services in the United States, Canada, and internationally. It operates through three segments: Fire & Emergency, Commercial, and Recreation. The Fire & Emergency segment provides fire apparatus equipment under the Emergency One, Kovatch Mobile Equipment, Ferrara, Spartan Emergency Response, Smeal, Spartan Fire Chassis, and Ladder Tower brand names; and ambulances under the American Emergency Vehicles, Horton Emergency Vehicles, Leader Emergency Vehicles, Road Rescue, and Wheeled Coach brand names. The Commercial segment offers transit buses, type A school buses, sweepers, and terminal trucks under the Collins Bus, Eldorado National (California), Magellan, Capacity, and LayMor brand names. The Recreation segment offers motorized and towable RV models under the American Coach, Fleetwood RV, Holiday Rambler, Renegade RV, Midwest Automotive Designs, and Lance Camper brands; and produces a range of custom molded fiberglass products. The company sells its products to municipalities, government agencies, private contractors, consumers, and industrial and commercial end users through its direct sales force or dealer network. The company was formerly known as Allied Specialty Vehicles, Inc. and changed its name to REV Group, Inc. in November 2015. REV Group, Inc. was incorporated in 2008 and is based in Brookfield, Wisconsin.