Comparing Torm (NASDAQ:TRMD) & Teekay Tankers (NYSE:TNK)

Torm (NASDAQ:TRMD) and Teekay Tankers (NYSE:TNK) are both mid-cap energy companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Profitability

This table compares Torm and Teekay Tankers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Torm	35.51%	27.24%	17.96%
Teekay Tankers	51.35%	22.11%	20.23%

Institutional and Insider Ownership

73.9% of Torm shares are held by institutional investors. Comparatively, 52.7% of Teekay Tankers shares are held by institutional investors. 0.4% of Torm shares are held by insiders. Comparatively, 1.9% of Teekay Tankers shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations for Torm and Teekay Tankers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torm	0	2	1	1	2.75
Teekay Tankers	1	3	3	1	2.50

Torm presently has a consensus target price of $38.00, suggesting a potential downside of 0.13%. Teekay Tankers has a consensus target price of $77.00, suggesting a potential downside of 20.79%. Given Torm’s stronger consensus rating and higher probable upside, equities analysts clearly believe Torm is more favorable than Teekay Tankers.

Dividends

Torm pays an annual dividend of $7.01 per share and has a dividend yield of 18.4%. Teekay Tankers pays an annual dividend of $1.00 per share and has a dividend yield of 1.0%. Torm pays out 115.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Teekay Tankers pays out 5.9% of its earnings in the form of a dividend. Teekay Tankers has increased its dividend for 2 consecutive years.

Earnings and Valuation

This table compares Torm and Teekay Tankers”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torm	$1.34 billion	2.90	$285.30 million	$6.07	6.27
Teekay Tankers	$951.80 million	3.53	$351.19 million	$16.97	5.73

Teekay Tankers has lower revenue, but higher earnings than Torm. Teekay Tankers is trading at a lower price-to-earnings ratio than Torm, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Torm has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, Teekay Tankers has a beta of -0.19, indicating that its stock price is 119% less volatile than the S&P 500.

Summary

Teekay Tankers beats Torm on 9 of the 17 factors compared between the two stocks.

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.

About Teekay Tankers

Teekay Tankers Ltd. provides crude oil and other marine transportation services to oil industries in Bermuda and internationally. The company offers voyage and time charter services; offshore ship-to-ship transfer services of commodities primarily crude oil and refined oil products; and tanker commercial and technical management services. It also engages management of vessels, procurement, and equipment rental businesses. Teekay Tankers Ltd. was incorporated in 2007 and is headquartered in Hamilton, Bermuda.