Covenant Logistics Group, Inc. (NASDAQ/GS: CVLG) has announced a quarterly cash dividend of $0.11 per share of class A and class B common stock. The dividend is payable to stockholders of record on March 1, 2024, and is expected to be paid on March 29, 2024. This dividend is part of a cash dividend program previously approved by the company’s board of directors, with future declarations subject to final determination each quarter.
David R. Parker, Chairman and Chief Executive Officer of Covenant, commented on the announcement, saying, "We are pleased to declare this quarterly cash dividend, which reflects our ongoing commitment to enhancing stockholder value and demonstrates our confidence in the company's financial strength and long-term outlook."
The company's shares have moved -0.5%, and are now trading at a price of $54.35.
Covenant Logistics Group, Inc. offers a range of transportation and logistics services across the United States, including expedited and dedicated truckload capacity, warehousing, transportation management, and freight brokerage services. The company's class A common stock is traded on the Nasdaq Global Select Market under the symbol "CVLG."
The company's full 8-K submission is available here.
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $880 | $885 | $839 | $1,046 | $1,217 | $1,126 |
| Operating Margins | 6% | 1% | -2% | 6% | 10% | 5% |
| Net Margins | 5% | 1% | -5% | 6% | 9% | 5% |
| Net Income (M) | $43 | $8 | -$43 | $61 | $109 | $54 |
| Net Interest Expense (M) | $7 | $8 | $7 | $3 | $3 | $6 |
| Depreciation & Amort. (M) | $74 | $78 | $65 | $54 | $58 | $67 |
| Diluted Shares (M) | 18 | 19 | 17 | 17 | 16 | 14 |
| Earnings Per Share | $2.3 | $0.45 | -$2.46 | $3.57 | $7.0 | $3.83 |
| EPS Growth | n/a | -80.43% | -646.67% | 245.12% | 96.08% | -45.29% |
| Avg. Price | $27.6 | $17.04 | $14.0 | $22.04 | $21.81 | $54.62 |
| P/E Ratio | 11.9 | 37.04 | -5.69 | 6.11 | 3.01 | 13.45 |
| Free Cash Flow (M) | $50 | n/a | -$31 | $38 | $59 | -$60 |
| CAPEX (M) | $75 | $138 | $94 | $35 | $100 | $151 |
| EV / EBITDA | 5.49 | 6.84 | 6.58 | 3.42 | 2.55 | 7.41 |
| Total Debt (M) | $230 | $321 | $88 | $52 | $156 | $195 |
| Net Debt / EBITDA | 1.6 | 3.22 | 1.54 | 0.36 | 0.49 | 1.52 |
| Current Ratio | 1.66 | 1.58 | 1.11 | 1.32 | 1.43 | 1.18 |
Covenant Logistics stock appears undervalued at a price of $54.35 due to its strong revenue and capital expenditure growth, as well as a fairly valued PEG ratio. However, its lower operating margins compared to industry average and the reliance on share buybacks for EPS growth raise concerns. Additionally, the company's total liabilities significantly exceed its current assets, highlighting potential financial risk, despite a current ratio slightly above 1. The firm's free cash flows, while positive, have shown a declining trend over the last 5 years.
The company's revenue is growing at a healthy rate of 5.0%, and its capital expenditures are increasing at a rate of 7.2%, indicating a commitment to expansion and potential future profitability. The PEG ratio of 1.16, close to 1, suggests that the shares are likely fairly valued in terms of growth potential. However, Covenant Logistics's operating margins have consistently lagged behind the industry average, although they are showing signs of improvement. The company has also relied on share buybacks to sustain its EPS growth, which raises questions about the sustainability of its earnings growth strategy.
The firm's total liabilities significantly outweigh its current assets, with a net current asset level in the negative. While the current ratio is slightly above 1, signaling that the company can cover its short-term obligations, the imbalance between liabilities and assets raises concerns about financial stability. The free cash flows, while positive on average, have shown a declining trend over the last 5 years, suggesting potential challenges in generating cash from operations.
