Critical Analysis: Torm (NASDAQ:TRMD) versus COSCO SHIPPING (OTCMKTS:CICOY)

COSCO SHIPPING (OTCMKTS:CICOY) and Torm (NASDAQ:TRMD) are both transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a summary of current ratings and price targets for COSCO SHIPPING and Torm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
COSCO SHIPPING	2	2	0	0	1.50
Torm	1	2	1	1	2.40

Torm has a consensus price target of $34.00, indicating a potential upside of 32.24%. Given Torm’s stronger consensus rating and higher possible upside, analysts clearly believe Torm is more favorable than COSCO SHIPPING.

Profitability

This table compares COSCO SHIPPING and Torm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
COSCO SHIPPING	N/A	N/A	N/A
Torm	21.29%	13.26%	8.48%

Dividends

COSCO SHIPPING pays an annual dividend of $0.57 per share and has a dividend yield of 5.8%. Torm pays an annual dividend of $2.04 per share and has a dividend yield of 7.9%. Torm pays out 71.8% of its earnings in the form of a dividend.

Insider and Institutional Ownership

73.9% of Torm shares are held by institutional investors. 0.4% of Torm shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares COSCO SHIPPING and Torm”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
COSCO SHIPPING	$32.53 billion	0.95	$6.84 billion	N/A	N/A
Torm	$1.34 billion	1.80	$285.30 million	$2.84	9.05

COSCO SHIPPING has higher revenue and earnings than Torm.

Volatility & Risk

COSCO SHIPPING has a beta of 1.02, suggesting that its stock price is 2% more volatile than the S&P 500. Comparatively, Torm has a beta of -0.01, suggesting that its stock price is 101% less volatile than the S&P 500.

Summary

Torm beats COSCO SHIPPING on 11 of the 15 factors compared between the two stocks.

About COSCO SHIPPING

COSCO SHIPPING Holdings Co., Ltd., an investment holding company, engages in the container shipping, managing and operating container terminals, and other terminal related businesses in the United States, Europe, the Asia Pacific, Mainland China, and internationally. It operates through Container Shipping Business and Terminal Business segments. The company offers freight forwarding and transportation, vessel chartering, container transportation, marine, vessel management and manning, cargo and liner agency, logistics, document, shipping agency and other sea transport, container stack, cargo storage, and cargo transportation services. It is also involved in the design and manufacture of computer software, as well as provision of technology services and solutions; asset management business; and operation of terminals. The company was formerly known as China COSCO Holdings Company Limited and changed its name to COSCO SHIPPING Holdings Co., Ltd. in November 2016. COSCO SHIPPING Holdings Co., Ltd. was incorporated in 2005 and is based in Shanghai, the People’s Republic of China.

About Torm

TORM plc, a shipping company, owns and operates a fleet of product tankers in the United Kingdom. It operates in two operating segments, Tanker and Marine Exhaust. The Tanker segment transports refined oil products, such as gasoline, jet fuel, kerosene, naphtha, and gas oil, as well as dirty petroleum products, including fuel oil. The Marine Exhaust segment engages in developing and producing advanced and green marine equipment. TORM plc was founded in 1889 and is based in London, the United Kingdom.