Scorpio Tankers (NYSE: STNG) and Hoegh LNG Partners (NYSE:HMLP) are both small-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.
Insider & Institutional Ownership
65.4% of Scorpio Tankers shares are held by institutional investors. Comparatively, 64.1% of Hoegh LNG Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Scorpio Tankers pays an annual dividend of $0.04 per share and has a dividend yield of 1.3%. Hoegh LNG Partners pays an annual dividend of $1.72 per share and has a dividend yield of 9.9%. Scorpio Tankers pays out -5.1% of its earnings in the form of a dividend. Hoegh LNG Partners pays out 109.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Scorpio Tankers has increased its dividend for 3 consecutive years.
This table compares Scorpio Tankers and Hoegh LNG Partners’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Hoegh LNG Partners||38.90%||7.77%||3.30%|
Valuation & Earnings
This table compares Scorpio Tankers and Hoegh LNG Partners’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Scorpio Tankers||$522.75 million||1.83||-$24.90 million||($0.79)||-3.89|
|Hoegh LNG Partners||$91.11 million||3.77||$41.37 million||$1.57||11.08|
Hoegh LNG Partners has lower revenue, but higher earnings than Scorpio Tankers. Scorpio Tankers is trading at a lower price-to-earnings ratio than Hoegh LNG Partners, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of current ratings for Scorpio Tankers and Hoegh LNG Partners, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Hoegh LNG Partners||0||0||5||0||3.00|
Scorpio Tankers presently has a consensus target price of $6.44, indicating a potential upside of 109.69%. Hoegh LNG Partners has a consensus target price of $21.63, indicating a potential upside of 24.28%. Given Scorpio Tankers’ higher probable upside, equities analysts clearly believe Scorpio Tankers is more favorable than Hoegh LNG Partners.
Risk and Volatility
Scorpio Tankers has a beta of 1.58, meaning that its stock price is 58% more volatile than the S&P 500. Comparatively, Hoegh LNG Partners has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.
Scorpio Tankers Company Profile
Scorpio Tankers Inc. (Scorpio Tankers) is engaged in the seaborne transportation of refined petroleum products in the international shipping markets. The Company operates through four segments: Handymax, MR, LR1/Panamax and LR2. As of March 15, 2017, the Company’s fleet consisted of 78 owned tankers (22 LR2, 14 Handymax and 42 MR) with a weighted average age of approximately 2.3 years, and 19 time or bareboat chartered-in tankers, which it operated (one LR2, one LR1, eight MR and nine Handymax) (collectively referred to as its Operating Fleet). As of March 1, 2017, the Company’s total oil tanker fleet (crude, products and product/chemical tankers) consisted of 4,754 ships with a combined capacity of 525.9 million deadweight tonnage. As of December 31, 2016, the Company also had contracts for the construction of one LR2 tanker and eight MR tankers. Its vessels include STI Brixton, STI Comandante, STI Finchley, STI Hammersmith, STI Larvotto, STI San Antonio and STI Regina.
Hoegh LNG Partners Company Profile
Hoegh LNG Partners LP owns, operates and acquires floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers and other LNG infrastructure assets under long-term charters. The Company’s segments include Majority held FSRUs, Joint venture FSRUs and other. The Majority held FSRUs segment includes the direct financing lease related to the PT Perusahaan Gas Negara (Persero) Tbk (PGN) FSRU Lampung and the operating lease related to the Hoegh Gallant. The Joint venture FSRUs segment includes approximately two FSRUs, including the GDF Suez LNG Supply S.A. (GDF Suez) Neptune and the GDF Suez Cape Ann, which operate under long term time charters. The Company intends to acquire newbuilding FSRUs on long-term charters, rather than FSRUs based on retrofitted, first-generation LNG carriers. The PGN FSRU Lampung is located offshore in the Lampung province at the southeast coast of Sumatra, Indonesia.
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