Better buy: Clipper Logistics plc or Wincanton plc?

Traditionally, companies specialising in freight and logistics services have made for rather dull investments. With the seemingly unstoppable rise of online shopping however, I think this could be set to change.

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Let's look at two small-caps operating in this industry, Clipper Logistics(LSE: CLG) and Wincanton(LSE: WIN). Which one looks like delivering the goods for investors?

Excellent interims

I've been bullish on Clipper Logistics for a while now and today's interim figures only serve to increase my confidence in the company.

Revenue and profit growth have been strong across the group over the last six months with the former rising by 16.5% to £164.9m and the latter by 25.5% to £6.9m (before tax). Earnings per share increased 23.3% and cash generated from operations rocketed 67% to £12.3m from £7.4m in the same period last year.

In terms of operational highlights, Clipper has extended its click-and-collect network and, having recently signed a 10-year agreement, launched a returns a pre-retail processing facility for John Lewis in Northampton. The company expects that this will "significantly enhance profits in future financial periods."

In addition to securing new contracts with M&S and Halfords, Clipper has also made progress with its operations in Germany -- the full benefits of which should be felt in the next financial year. With Brexit on the horizon, some geographical diversification is never a bad thing.

So, an excellent set of results from the Leeds-based business, more than justifying the 5% rise in its shares this morning.

On a forecast price-to-earnings (P/E) ratio of 28 though, shares in Clipper are without doubt highly valued. While a 20% hike in its interim payout will be welcomed, the forecast 2% yield attached to the company's shares is also relatively small. Nevertheless, figures like those announced today combined with the rapid migration of consumers online suggest that this is very much a share to buy and hold for the long term. And with a market cap of just £362m, there's lots of room left for Clipper to grow.

Back on track

After a sticky few years (at least financially), last month's half-year results from Chippenham-based Wincanton suggest that it's continuing to turn things around. The creation of an e-commerce national fulfilment centre for Majestic Wine along with contract renewals from the Co-Op and Sainsbury's were undeniably positive developments. Although the ending of some contracts saw revenue dip by 1.7%, underlying operating profits rose by 19.2% to £26.1m which, in turn, helped earnings per share jump by 35.9%.

Given its previous financial difficulties however, the continuing reduction of the company's net debt by another £7.3m in this reporting period was, for me, the most important figure. Net debt now stands at £32m, almost £140m less than in 2011. Although cash flow remains an issue, this momentum is encouraging.

Shares in Wincanton currently trade on a forecast P/E of just under nine. That seems incredibly cheap for a company that's managed to deliver double-digit earnings per share growth in five of the last six years. Now that dividends have resumed, there's even a juicy (and easily covered) forecast 4% yield for 2017. Whether this makes Wincanton a better opportunity depends -- I think -- on the strategy of the prospective investor.

For income and value, Wincanton looks a clear winner. For growth-focused investors, its enviable position with key retailers makes Clipper the more attractive option.

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Paul Summers owns shares in Clipper Logistics. The Motley Fool UK has no position in any of the shares mentioned. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.