International Seaways (INSW) vs. KNOT Offshore Partners (KNOP) Critical Comparison

International Seaways (NYSE: INSW) and KNOT Offshore Partners (NYSE:KNOP) are both large-cap transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Profitability

This table compares International Seaways and KNOT Offshore Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
International Seaways -31.22% 0.91% 0.64%
KNOT Offshore Partners 35.75% 10.26% 4.31%

Dividends

KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 9.0%. International Seaways does not pay a dividend. KNOT Offshore Partners pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KNOT Offshore Partners has raised its dividend for 3 consecutive years.

Insider & Institutional Ownership

85.5% of International Seaways shares are held by institutional investors. Comparatively, 49.9% of KNOT Offshore Partners shares are held by institutional investors. 0.5% of International Seaways shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for International Seaways and KNOT Offshore Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
International Seaways 0 0 1 0 3.00
KNOT Offshore Partners 0 0 0 0 N/A

International Seaways currently has a consensus target price of $30.00, indicating a potential upside of 44.79%. Given International Seaways’ higher probable upside, research analysts plainly believe International Seaways is more favorable than KNOT Offshore Partners.

Valuation and Earnings

This table compares International Seaways and KNOT Offshore Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
International Seaways $398.32 million 1.52 -$18.22 million ($3.50) -5.92
KNOT Offshore Partners $173.67 million 3.97 $59.84 million $2.39 9.71

KNOT Offshore Partners has higher revenue, but lower earnings than International Seaways. International Seaways is trading at a lower price-to-earnings ratio than KNOT Offshore Partners, indicating that it is currently the more affordable of the two stocks.

Summary

KNOT Offshore Partners beats International Seaways on 8 of the 15 factors compared between the two stocks.

International Seaways Company Profile

International Seaways, Inc. and its subsidiaries own and operate a fleet of oceangoing vessels. The Company’s oceangoing vessels engage in the transportation of crude oil and petroleum products in the International Flag trades. The Company’s segments are International Crude Tankers and International Product Carriers. Its 55-vessel fleet consists of Ultra Large Crude Carrier (ULCC), Very Large Crude Carrier (VLCC), Aframax and Panamax crude tankers, as well as long range 1 (LR1), LR2 and medium range (MR) product carriers. Its International Crude Tankers segment is made up of a ULCC and a fleet of VLCCs, Aframaxes, and Panamaxes. Its International Product Carriers segment consists of a fleet of MRs, LR1s and an LR2 engaged in the transportation of crude and refined petroleum products. Through joint venture partnerships (the JVs), it has ownership interests in approximately four liquefied natural gas carriers and approximately two floating storage and offloading service vessels.

KNOT Offshore Partners Company Profile

KNOT Offshore Partners LP (KNOT Offshore Partners or the Partnership), owns, operates and acquires shuttle tankers under long-term charters. The Partnership’s vessels in its fleet are chartered to Statoil ASA (Statoil), Petrobras Transporte S.A. (Transpetro), Repsol Sinopec Brasil, S.A. (Repsol), Royal Dutch Shell plc, ExxonMobil, and Eni Trading and Shipping S.p.A. (ENI). As of March 17, 2017, the Company had a fleet of 12 shuttle tankers. Its shuttle tankers include Fortaleza Knutsen, Recife Knutsen, Bodil Knutsen and Dan Cisne. KNOT Offshore Partners GP LLC is the general partner of the Partnership. It is engaged in the loading, transportation and storage of the crude oil using the vessels in its fleet. It provides all of these services under time charters and bareboat charters. As of December 31, 2016, eight of its shuttle tankers were chartered under time charters and four of its shuttle tankers were chartered under bareboat charters.

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