Comparing Baltic Trading (BALT) & Scorpio Bulkers (SALT)

Baltic Trading (NYSE: BALT) and Scorpio Bulkers (NYSE:SALT) are both small-cap industrials companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, valuation, institutional ownership, risk, profitability, dividends and earnings.

Risk and Volatility

Baltic Trading has a beta of 1.33, suggesting that its stock price is 33% more volatile than the S&P 500. Comparatively, Scorpio Bulkers has a beta of 3.56, suggesting that its stock price is 256% more volatile than the S&P 500.

Institutional and Insider Ownership

40.3% of Scorpio Bulkers shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Scorpio Bulkers pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Baltic Trading does not pay a dividend. Scorpio Bulkers pays out -1.8% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings and price targets for Baltic Trading and Scorpio Bulkers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baltic Trading 0 0 0 0 N/A
Scorpio Bulkers 0 2 3 0 2.60

Scorpio Bulkers has a consensus target price of $10.20, indicating a potential upside of 34.21%. Given Scorpio Bulkers’ higher possible upside, analysts clearly believe Scorpio Bulkers is more favorable than Baltic Trading.

Valuation & Earnings

This table compares Baltic Trading and Scorpio Bulkers’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Baltic Trading N/A N/A N/A ($1.14) -1.37
Scorpio Bulkers $78.40 million 7.32 -$124.83 million ($1.10) -6.91

Baltic Trading has higher earnings, but lower revenue than Scorpio Bulkers. Scorpio Bulkers is trading at a lower price-to-earnings ratio than Baltic Trading, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Baltic Trading and Scorpio Bulkers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baltic Trading -613.08% -49.39% -30.66%
Scorpio Bulkers -27.65% -4.69% -2.89%

Summary

Scorpio Bulkers beats Baltic Trading on 11 of the 12 factors compared between the two stocks.

Baltic Trading Company Profile

Baltic Trading Limited is a shipping business focused on the drybulk industry spot market. The Company’s fleet consists of four Capesize vessels, two Ultramax vessels, four Supramax vessels and five Handysize vessels with an aggregate carrying capacity of approximately 1,221,000 deadweight tons. Its fleet contains six groups of sister ships, which are vessels of virtually identical sizes and specifications. It operates a fleet of drybulk ships that transport iron ore, coal, grain, steel products and other drybulk cargoes along shipping routes around the world. It operates its vessels on spot market-related time charters, short-term time charters or in vessel pools trading in the spot market. Genco Shipping & Trading Limited (Genco) serves as the Company’s manager. Genco provides it with commercial and strategic management of its fleet.

Scorpio Bulkers Company Profile

Scorpio Bulkers Inc. is a shipping company. The Company owns and operates newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 deadweight tons (dwt). The Company operates through two segments: Kamsarmax and Ultramax. Its Kamsarmax segment includes vessels ranging from approximately 77,500 DWT to 98,700 DWT. Its Ultramax segment includes vessels ranging from approximately 60,200 DWT to 64,000 DWT. All of its owned vessels have carrying capacities of greater than 60,000 dwt. Its vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes, and are employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of December 31, 2016, its operating fleet of 48 vessels consisted of 47 drybulk vessels and one chartered-in drybulk vessel. It also has a contract for the construction of one newbuilding drybulk vessel.

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