Early earnings season is a painful time for a Foolish writer. You know there are good stories to tell. They're just around the bend. But they're not quite here just yet. So what do you do to keep that itchy writing finger from twitching, while awaiting news from the Ciscos and Intels and Googles (oh, my!)? You scan the lists of unfamiliar names reporting earnings in the wee hours of earnings season, looking for an interesting story, and sometimes, just an interesting name.
Which brings us to the subject of today's Take: Heartland Express (NASDAQ:HTLD). I know what you're thinking: "Wasn't that the name of Tom Harkin's 1992 presidential primary campaign bus?" Not quite. But you got the state right. Like Sen. Harkin, Midwestern short-to-medium-haul trucker Heartland hails from the great state of Iowa. It doesn't get too far from home, either, specializing in "short" distance deliveries of 400 miles or less.
But as mundane as this business sounds, the company behind it is anything but boring. Just for kicks, I lined up Heartland against its three closest rivals (according to Yahoo! Finance): Knight Transportation (NYSE:KNX), Swift Transportation (NASDAQ:SWFT), and Werner Enterprises (NASDAQ:WERN).
Right from the get-go, Heartland wins the Foolish award for imaginative corporate name-picking. But that's not the only area in which Heartland comes out on top, as this chart demonstrates:
|
Market cap |
Net cash on hand |
Free cash flow (TTM)* | |
|---|---|---|---|
|
Heartland |
$1.55 billion |
$265 million |
$63 million |
|
Knight |
$1.39 billion |
$39 million |
($22 million) |
|
Swift |
$1.65 billion |
($560 million) |
($59 million) |
|
Werner |
$1.55 billion |
$96 million |
($134 million) |
(* TTM stands for trailing 12 months.)
I have to say, this is the first time I've ever seen four companies, all considered close competitors, that resemble each other so closely in size. Yet as similar as they appear by market cap, there's a chasm of quality between Heartland and its peers. Leaving aside the many other metrics you could use to compare the companies, the two big differences that I want to focus on are Heartland's relative cash-richness, and the fact that it's the only one of the bunch to have produced positive free cash flow over the past 12 months -- as well as every one of the past seven years.
It almost seems like Heartland has toomuch cash. With its copious flows of free cash, the company certainly doesn't need all the extra moola lying around, taking up warehouse space or, almost as bad, earning a percent (or three) in short-term treasuries. Which is why I found the most interesting bit of information from Heartland's earnings release yesterday to be not the company's 14% increase in both sales and earnings per share, but rather its buyback of 1.2 million shares over the past six months, and the boosting of its dividend by nearly 50%.
To which news I can only respond: Good work, Heartland. Keep on truckin'.
Fool contributor Rich Smith has no position in any of the companies mentioned in this article.
