Diana Containerships (DCIX) & Danaos Corporation (DAC) Critical Survey

Diana Containerships (NASDAQ: DCIX) and Danaos Corporation (NYSE:DAC) are both small-cap transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, institutional ownership, dividends, valuation and profitability.

Profitability

This table compares Diana Containerships and Danaos Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diana Containerships -467.42% -27.46% -10.57%
Danaos Corporation -92.96% 16.72% 3.09%

Volatility and Risk

Diana Containerships has a beta of 2.19, suggesting that its stock price is 119% more volatile than the S&P 500. Comparatively, Danaos Corporation has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Valuation & Earnings

This table compares Diana Containerships and Danaos Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Diana Containerships $22.70 million 0.01 -$8.54 million ($549.59) 0.00
Danaos Corporation $447.83 million 0.34 $281.14 million ($3.80) -0.37

Danaos Corporation has higher revenue and earnings than Diana Containerships. Danaos Corporation is trading at a lower price-to-earnings ratio than Diana Containerships, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Diana Containerships and Danaos Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diana Containerships 0 0 1 0 3.00
Danaos Corporation 0 2 0 0 2.00

Diana Containerships currently has a consensus target price of $336.00, suggesting a potential upside of 73,799.43%. Danaos Corporation has a consensus target price of $3.00, suggesting a potential upside of 114.29%. Given Diana Containerships’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Diana Containerships is more favorable than Danaos Corporation.

Institutional & Insider Ownership

30.0% of Diana Containerships shares are held by institutional investors. Comparatively, 2.1% of Danaos Corporation shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Danaos Corporation beats Diana Containerships on 7 of the 12 factors compared between the two stocks.

Diana Containerships Company Profile

Diana Containerships Inc. is a holding company. The Company, through its subsidiaries, is engaged in the ownership of containerships. As of December 31, 2016, the Company’s fleet consisted of six panamax and six post-panamax containerships with a combined carrying capacity of 61,517 twenty-foot equivalent unit (TEU). As of December 31, 2016, the Company’s fleet included SAGITTA, CENTAURUS, NEW JERSEY, PAMINA, DOMINGO, DOUKATO, PUELO, PUCON, MARCH, GREAT and HAMBURG. The Company’s customers include national, regional and international companies. The Company charters its vessels to customers primarily pursuant to short-term and long-term time charters. As of December 31, 2016, its subsidiaries included Likiep Shipping Company Inc., Orangina Inc., Rongerik Shipping Company Inc., Dud Shipping Company Inc., Mago Shipping Company Inc., Eluk Shipping Company Inc., Oruk Shipping Company Inc., Meck Shipping Company Inc., Langor Shipping Company Inc. and Unitized Ocean Transport Limited.

Danaos Corporation Company Profile

Danaos Corporation is a holding company and an international owner of containerships, chartering its vessels to a range of liner companies. The Company’s principal business is the acquisition and operation of vessels. The Company conducts its operations through the vessel owning companies, whose principal activity is the ownership and operation of containerships that are under the management of a related party of the company. The Company’s manager is Danaos Shipping Company Limited (Danaos Shipping). The Company has a fleet of over 50 containerships aggregating approximately 329,590 twenty-foot equivalent units (TEUs). Its containership fleet includes approximately 53 containerships deployed on time charters and approximately two containerships deployed on bareboat charter. Gemini Shipholdings Corporation (Gemini), a company beneficially owned by the Company, owns approximately four additional containerships of over 24,000 TEU aggregate capacity.

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