Comparing KNOT Offshore Partners (KNOP) and Gener8 Maritime (GNRT)

KNOT Offshore Partners (NYSE: KNOP) and Gener8 Maritime (NYSE:GNRT) are both small-cap transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, earnings, analyst recommendations, institutional ownership, valuation, dividends and profitability.

Risk & Volatility

KNOT Offshore Partners has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Gener8 Maritime has a beta of 1.4, meaning that its stock price is 40% more volatile than the S&P 500.

Dividends

KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 10.0%. Gener8 Maritime 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 increased its dividend for 3 consecutive years.

Earnings and Valuation

This table compares KNOT Offshore Partners and Gener8 Maritime’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KNOT Offshore Partners $173.67 million 3.91 $59.84 million $2.39 8.68
Gener8 Maritime $404.62 million 1.36 $67.30 million ($1.41) -4.70

Gener8 Maritime has higher revenue and earnings than KNOT Offshore Partners. Gener8 Maritime 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.

Analyst Recommendations

This is a summary of current ratings and recommmendations for KNOT Offshore Partners and Gener8 Maritime, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KNOT Offshore Partners 0 0 0 0 N/A
Gener8 Maritime 0 0 1 0 3.00

Gener8 Maritime has a consensus target price of $10.00, suggesting a potential upside of 51.06%. Given Gener8 Maritime’s higher probable upside, analysts clearly believe Gener8 Maritime is more favorable than KNOT Offshore Partners.

Insider & Institutional Ownership

43.8% of KNOT Offshore Partners shares are owned by institutional investors. Comparatively, 76.0% of Gener8 Maritime shares are owned by institutional investors. 13.7% of Gener8 Maritime shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares KNOT Offshore Partners and Gener8 Maritime’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KNOT Offshore Partners 34.02% 11.18% 4.40%
Gener8 Maritime -34.10% 1.16% 0.56%

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.

Gener8 Maritime Company Profile

Gener8 Maritime, Inc. is a provider of international seaborne crude oil transportation services. The Company operates through the transportation of international seaborne crude oil and petroleum products with its fleet of vessels segment. As of March 10, 2017, the Company owned a fleet of 40 tankers on the water, consisting of 24 Very Large Crude Carriers (VLCCs), 10 Suezmax vessels, four Aframax vessels and two Panamax vessels, with an aggregate carrying capacity of 9.4 million deadweight tons (DWT) and one eco VLCC newbuilding. As of March 10, 2017, approximately 77% of its total fleet carrying capacity based on DWT, including newbuildings, was focused on VLCC vessels. As of March 10, 2017, all of its VLCC vessels were deployed in Navig8 Group’s VL8 Pool, all of its Suezmax vessels were deployed in Navig8 Group’s Suez8 Pool and all of its Aframax vessels were deployed in the Navig8 Group’s V8 Pool.

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