Ardmore Shipping Corporation (ASC) versus Costamare (CMRE) Critical Analysis

Ardmore Shipping Corporation (NYSE: ASC) and Costamare (NYSE:CMRE) are both small-cap transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Dividends

Costamare pays an annual dividend of $0.40 per share and has a dividend yield of 6.6%. Ardmore Shipping Corporation does not pay a dividend. Costamare pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Costamare has increased its dividend for 3 consecutive years.

Earnings & Valuation

This table compares Ardmore Shipping Corporation and Costamare’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Ardmore Shipping Corporation $164.40 million 1.70 $3.74 million ($0.37) -22.43
Costamare $468.19 million 1.38 $81.70 million $0.36 16.81

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

Profitability

This table compares Ardmore Shipping Corporation and Costamare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ardmore Shipping Corporation -6.45% -3.08% -1.41%
Costamare 14.03% 7.57% 3.41%

Institutional and Insider Ownership

77.1% of Ardmore Shipping Corporation shares are owned by institutional investors. Comparatively, 26.4% of Costamare shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Ardmore Shipping Corporation has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500. Comparatively, Costamare has a beta of 2.14, meaning that its share price is 114% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ardmore Shipping Corporation and Costamare, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ardmore Shipping Corporation 0 1 3 0 2.75
Costamare 0 3 2 0 2.40

Ardmore Shipping Corporation currently has a consensus price target of $10.13, indicating a potential upside of 21.99%. Costamare has a consensus price target of $7.10, indicating a potential upside of 17.36%. Given Ardmore Shipping Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Ardmore Shipping Corporation is more favorable than Costamare.

Summary

Costamare beats Ardmore Shipping Corporation on 9 of the 15 factors compared between the two stocks.

About Ardmore Shipping Corporation

Ardmore Shipping Corporation provides seaborne transportation of petroleum products and chemicals to national oil companies, oil and chemical traders, and chemical companies, with its fleet of mid-size product and chemical tankers. The Company’s segment relates to the operations of its vessels. The Company’s fleet consists of over 20 double-hulled product and chemical tankers, all of which are in operation. The Company’s vessels include Ardmore Seavaliant, Ardmore Seaventure, Ardmore Seavantage, Ardmore Seavanguard, Ardmore Sealion, Ardmore Seafox, Ardmore Seahawk, Ardmore Endeavour, Ardmore Seafarer, Ardmore Seatrader, Ardmore Seamaster and Ardmore Sealeader. The Company has over 30 subsidiaries, the majority of which represent single ship-owning companies for its fleet. Its subsidiaries include Ardmore Shipping (Bermuda) Limited (ASBL), Ardmore Shipping Services (Ireland) Limited (ASSIL), Ardmore Shipping (Asia) Pte. Limited and Ardmore Shipping (Americas) LLC.

About Costamare

Costamare Inc. (Costamare) is a holding company. The Company is an international owner of containerships. The Company is engaged in chartering its vessels to various liner companies. The Company provides marine transportation services around the world by chartering its container vessels to liner operators under long, medium and short-term time charters. As of March 10, 2017, the Company had a fleet of 69 containerships with a total capacity of approximately 456,000 TEU, including five newbuilds on order. The Company’s fleet of vessels includes Cosco Guangzhou, Titan, Cosco Yantian, Valor, Valiant and Maersk Kobe. Its subsidiaries include Adele Shipping Co., Bastian Shipping Co., Cadence Shipping Co., Jodie Shipping Co. and Kayley Shipping Co.

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