Analyzing Covenant Logistics Group (CVLG) and Its Peers

Covenant Logistics Group (NYSE:CVLG) is one of 101 public companies in the “Ground Transportation” industry, but how does it contrast to its rivals? We will compare Covenant Logistics Group to similar businesses based on the strength of its dividends, valuation, risk, profitability, earnings, analyst recommendations and institutional ownership.

Dividends

Covenant Logistics Group pays an annual dividend of $0.28 per share and has a dividend yield of 0.8%. Covenant Logistics Group pays out 254.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Ground Transportation” companies pay a dividend yield of 1.4% and pay out 27.9% of their earnings in the form of a dividend. Covenant Logistics Group has raised its dividend for 1 consecutive years. Covenant Logistics Group lags its rivals as a dividend stock, given its lower dividend yield and higher payout ratio.

Earnings and Valuation

This table compares Covenant Logistics Group and its rivals top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Covenant Logistics Group	$1.16 billion	$7.24 million	318.91
Covenant Logistics Group Competitors	$9.28 billion	$920.60 million	51.54

Covenant Logistics Group’s rivals have higher revenue and earnings than Covenant Logistics Group. Covenant Logistics Group is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Risk and Volatility

Covenant Logistics Group has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, Covenant Logistics Group’s rivals have a beta of 1.09, suggesting that their average share price is 9% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Covenant Logistics Group and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Covenant Logistics Group	1	0	4	2	3.00
Covenant Logistics Group Competitors	1322	6330	8432	253	2.47

Covenant Logistics Group currently has a consensus target price of $51.80, suggesting a potential upside of 47.66%. As a group, “Ground Transportation” companies have a potential upside of 11.49%. Given Covenant Logistics Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Covenant Logistics Group is more favorable than its rivals.

Profitability

This table compares Covenant Logistics Group and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Covenant Logistics Group	0.31%	9.14%	3.68%
Covenant Logistics Group Competitors	5.40%	9.39%	3.79%

Institutional & Insider Ownership

83.7% of Covenant Logistics Group shares are held by institutional investors. Comparatively, 59.6% of shares of all “Ground Transportation” companies are held by institutional investors. 36.7% of Covenant Logistics Group shares are held by insiders. Comparatively, 15.2% of shares of all “Ground Transportation” companies 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.

Summary

Covenant Logistics Group beats its rivals on 8 of the 15 factors compared.

Covenant Logistics Group Company Profile

Covenant Logistics Group, Inc., together with its subsidiaries, provides transportation and logistics services in the United States. It operates through four segments: Expedited, Dedicated, Managed Freight, and Warehousing. The Expedited segment primarily provides truckload services with high service freight and delivery standards, such as 1,000 miles in 22 hours or 15-minute delivery windows. The Dedicated segment provides customers with committed truckload capacity over contracted periods using equipment either owned or leased by the company. The Managed Freight segment offers brokerage services, including logistics capacity by outsourcing the carriage of customers’ freight to third parties; and transport management services, such as logistics services on a contractual basis to customers who prefer to outsource their logistics needs. The Warehousing segment provides day-to-day warehouse management services to customers. The segment also provides shuttle and switching services to shuttling containers and trailers. The company also engages in used equipment sales and leasing business. It serves transportation companies, such as parcel 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, 2021, it operated 2,291 tractors and 5,331 trailers. The company was formerly known as Covenant Transportation Group, Inc. and changed its name to Covenant Logistics Group, Inc. in July 2020. Covenant Logistics Group, Inc. was founded in 1986 and is based in Chattanooga, Tennessee.