Critical Comparison: Full Truck Alliance (NYSE:YMM) and Norfolk Southern (NYSE:NSC)

Full Truck Alliance (NYSE:YMM) and Norfolk Southern (NYSE:NSC) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Institutional & Insider Ownership

39.0% of Full Truck Alliance shares are owned by institutional investors. Comparatively, 75.1% of Norfolk Southern shares are owned by institutional investors. 16.5% of Full Truck Alliance shares are owned by insiders. Comparatively, 0.1% of Norfolk Southern shares are owned by 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 Full Truck Alliance and Norfolk Southern’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Full Truck Alliance	33.07%	10.68%	9.65%
Norfolk Southern	20.70%	18.22%	6.46%

Analyst Ratings

This is a summary of current ratings and recommmendations for Full Truck Alliance and Norfolk Southern, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Full Truck Alliance	0	3	6	0	2.67
Norfolk Southern	0	14	7	0	2.33

Full Truck Alliance presently has a consensus price target of $11.30, suggesting a potential upside of 26.56%. Norfolk Southern has a consensus price target of $348.81, suggesting a potential upside of 2.76%. Given Full Truck Alliance’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Full Truck Alliance is more favorable than Norfolk Southern.

Earnings & Valuation

This table compares Full Truck Alliance and Norfolk Southern”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Full Truck Alliance	$1.79 billion	5.21	$630.36 million	$0.59	15.13
Norfolk Southern	$12.18 billion	6.26	$2.87 billion	$11.93	28.45

Norfolk Southern has higher revenue and earnings than Full Truck Alliance. Full Truck Alliance is trading at a lower price-to-earnings ratio than Norfolk Southern, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Full Truck Alliance has a beta of 0.25, indicating that its stock price is 75% less volatile than the S&P 500. Comparatively, Norfolk Southern has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Dividends

Full Truck Alliance pays an annual dividend of $0.34 per share and has a dividend yield of 3.8%. Norfolk Southern pays an annual dividend of $5.40 per share and has a dividend yield of 1.6%. Full Truck Alliance pays out 57.6% of its earnings in the form of a dividend. Norfolk Southern pays out 45.3% 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.

Summary

Norfolk Southern beats Full Truck Alliance on 10 of the 16 factors compared between the two stocks.

About Full Truck Alliance

Full Truck Alliance Co. Ltd., together with its subsidiaries, operates a digital freight platform that connects shippers with truckers to facilitate shipments across distance ranges, cargo weights, and types in the People's Republic of China. The company offers freight matching services, such as freight listing and brokerage services; and online transaction services, as well as various value-added services, such as credit solutions, insurance brokerage, software solutions, electronic toll collection, and energy services. It also provides technology development and other services. The company was founded in 2011 and is based in Guiyang, China.

About Norfolk Southern

Norfolk Southern Corporation, together with its subsidiaries, engages in the rail transportation of raw materials, intermediate products, and finished goods in the United States. The company transports agriculture, forest, and consumer products comprising soybeans, wheat, corn, fertilizers, livestock and poultry feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper products, wood fibers, wood pulp, beverages, and canned goods; chemicals consist of sulfur and related chemicals, petroleum products comprising crude oil, chlorine and bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes, sand, and natural gas liquids; metals and construction materials, such as steel, aluminum products, machinery, scrap metals, cement, aggregates, minerals, clay, transportation equipment, and military-related products; and automotive, including finished motor vehicles and automotive parts, as well as coal. It also transports overseas freight through various Atlantic and Gulf Coast ports; and operates an intermodal network. As of December 31, 2023, the company operated approximately 19,100 route miles in 22 states and the District of Columbia. Norfolk Southern Corporation was incorporated in 1980 and is headquartered in Atlanta, Georgia.