Financial Contrast: Eagle Bulk Shipping (EGLE) and Nordic American Offshore (NAO)

Nordic American Offshore (NYSE: NAO) and Eagle Bulk Shipping (NASDAQ:EGLE) are both small-cap transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, dividends, institutional ownership, earnings, valuation, profitability and analyst recommendations.

Risk & Volatility

Nordic American Offshore has a beta of -0.21, meaning that its share price is 121% less volatile than the S&P 500. Comparatively, Eagle Bulk Shipping has a beta of 3.55, meaning that its share price is 255% more volatile than the S&P 500.

Institutional & Insider Ownership

31.6% of Nordic American Offshore shares are held by institutional investors. Comparatively, 14.0% of Eagle Bulk Shipping shares are held by institutional investors. 0.4% of Eagle Bulk Shipping shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Nordic American Offshore and Eagle Bulk Shipping’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nordic American Offshore -249.97% -14.06% -8.90%
Eagle Bulk Shipping -100.90% -11.66% -7.25%

Dividends

Nordic American Offshore pays an annual dividend of $0.08 per share and has a dividend yield of 6.6%. Eagle Bulk Shipping does not pay a dividend. Nordic American Offshore pays out -6.3% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Nordic American Offshore and Eagle Bulk Shipping, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nordic American Offshore 0 0 0 0 N/A
Eagle Bulk Shipping 0 0 1 0 3.00

Eagle Bulk Shipping has a consensus target price of $7.00, indicating a potential upside of 58.37%. Given Eagle Bulk Shipping’s higher probable upside, analysts clearly believe Eagle Bulk Shipping is more favorable than Nordic American Offshore.

Earnings and Valuation

This table compares Nordic American Offshore and Eagle Bulk Shipping’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nordic American Offshore $14.92 million 4.92 -$13.42 million ($1.26) -0.96
Eagle Bulk Shipping N/A N/A N/A ($3.73) -1.18

Eagle Bulk Shipping has higher revenue, but lower earnings than Nordic American Offshore. Eagle Bulk Shipping is trading at a lower price-to-earnings ratio than Nordic American Offshore, indicating that it is currently the more affordable of the two stocks.

Summary

Eagle Bulk Shipping beats Nordic American Offshore on 7 of the 12 factors compared between the two stocks.

About Nordic American Offshore

Nordic American Offshore Limited (NAO) operates platform supply vessels (PSV). The Company owns approximately eight vessels. The Company operates in the offshore support vessel market segment. The Company has approximately two vessels under construction. The Company’s vessels operate in the North Sea in both the term and spot market. The Company’s vessels include NAO Fighter, NAO Prosper, NAO Power, NAO Thunder, NAO Guardian, NAO Protector, NAO Storm and NAO Viking. Each of the Company’s vessels has a capacity of approximately 4,200 deadweight tonnage (DWT) and a cargo deck area of approximately 850 square meters. The Company’s vessels under construction include NAO Galaxy and NAO Horizon. Remoy Shipping AS and V. Ships Limited provide technical management for the Company’s vessels.

About Eagle Bulk Shipping

Eagle Bulk Shipping Inc. is engaged primarily in the ocean transportation of a range of major and minor bulk cargoes, including iron ore, coal, grain, cement and fertilizer, along worldwide shipping routes. The Company operates in the Handymax sector of the dry bulk industry, with particular emphasis on the Supramax class of vessels. The Company owns Supramax dry bulk vessel. Supramax dry bulk vessels range in size from 50,000 to 60,000 deadweight tons. These vessels have the cargo loading and unloading flexibility of on-board cranes while offering cargo carrying capacities approaching that of Panamax dry bulk vessels, which range in size from 60,000 to 100,000 deadweight tons and must rely on port facilities to load and offload their cargoes. On July 26, 2011 the Company sold its the Heron, a Supramax class of vessel.

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