Scorpio Tankers (NYSE: STNG) and Gener8 Maritime (NYSE:GNRT) are both small-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, earnings, analyst recommendations, valuation and risk.
Volatility and Risk
Scorpio Tankers has a beta of 1.58, meaning that its share price is 58% more volatile than the S&P 500. Comparatively, Gener8 Maritime has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.
Valuation & Earnings
This table compares Scorpio Tankers and Gener8 Maritime’s 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||1.79||-$24.90 million||($0.79)||-3.81|
|Gener8 Maritime||$404.62 million||0.88||$67.30 million||($1.41)||-3.04|
Gener8 Maritime has lower revenue, but higher earnings than Scorpio Tankers. Scorpio Tankers is trading at a lower price-to-earnings ratio than Gener8 Maritime, indicating that it is currently the more affordable of the two stocks.
Scorpio Tankers pays an annual dividend of $0.04 per share and has a dividend yield of 1.3%. Gener8 Maritime does not pay a dividend. Scorpio Tankers pays out -5.1% of its earnings in the form of a dividend. Scorpio Tankers has raised its dividend for 3 consecutive years.
This is a breakdown of current ratings and price targets for Scorpio Tankers and Gener8 Maritime, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Scorpio Tankers currently has a consensus price target of $6.44, suggesting a potential upside of 113.87%. Gener8 Maritime has a consensus price target of $10.00, suggesting a potential upside of 133.64%. Given Gener8 Maritime’s higher possible upside, analysts plainly believe Gener8 Maritime is more favorable than Scorpio Tankers.
This table compares Scorpio Tankers and Gener8 Maritime’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
65.4% of Scorpio Tankers shares are held by institutional investors. Comparatively, 76.1% of Gener8 Maritime shares are held by institutional investors. 13.7% of Gener8 Maritime shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Scorpio Tankers beats Gener8 Maritime on 9 of the 15 factors compared between the two stocks.
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.
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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