Matson (MATX) vs. Teekay Offshore Partners (TOO) Financial Analysis

Matson (NYSE: MATX) and Teekay Offshore Partners (NYSE:TOO) are both small-cap transportation companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, valuation, dividends, analyst recommendations, earnings and institutional ownership.

Dividends

Matson pays an annual dividend of $0.80 per share and has a dividend yield of 2.7%. Teekay Offshore Partners pays an annual dividend of $0.04 per share and has a dividend yield of 1.6%. Matson pays out 44.9% of its earnings in the form of a dividend. Teekay Offshore Partners pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Matson has increased its dividend for 5 consecutive years. Matson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Matson and Teekay Offshore Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Matson 11.33% 14.40% 3.63%
Teekay Offshore Partners -28.37% 3.87% 0.71%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Matson and Teekay Offshore Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Matson 0 2 2 0 2.50
Teekay Offshore Partners 0 2 3 0 2.60

Matson presently has a consensus price target of $33.25, suggesting a potential upside of 14.18%. Teekay Offshore Partners has a consensus price target of $3.25, suggesting a potential upside of 26.46%. Given Teekay Offshore Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Teekay Offshore Partners is more favorable than Matson.

Risk & Volatility

Matson has a beta of 1.43, meaning that its stock price is 43% more volatile than the S&P 500. Comparatively, Teekay Offshore Partners has a beta of 2.55, meaning that its stock price is 155% more volatile than the S&P 500.

Insider & Institutional Ownership

84.1% of Matson shares are owned by institutional investors. Comparatively, 77.9% of Teekay Offshore Partners shares are owned by institutional investors. 2.5% of Matson shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Matson and Teekay Offshore Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Matson $2.05 billion 0.61 $232.00 million $1.78 16.36
Teekay Offshore Partners $1.11 billion 0.95 -$303.20 million $0.01 257.00

Matson has higher revenue and earnings than Teekay Offshore Partners. Matson is trading at a lower price-to-earnings ratio than Teekay Offshore Partners, indicating that it is currently the more affordable of the two stocks.

Summary

Matson beats Teekay Offshore Partners on 11 of the 17 factors compared between the two stocks.

Matson Company Profile

Matson, Inc. provides ocean transportation and logistics services. The company's Ocean Transportation segment offers ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Alaska, and Guam, as well as to other island economies in Micronesia. It primarily transports dry containers of mixed commodities, refrigerated commodities, packaged foods and beverages, building materials, automobiles, and household goods; livestock; seafood; general sustenance cargo; and garments, footwear, and other retail merchandise. This segment also operates an expedited service from China to Long Beach, California, and various islands in the South Pacific, as well as Okinawa, Japan; and provides container stevedoring, refrigerated cargo services, inland transportation, container equipment maintenance, and other terminal services Hawaiian islands of Oahu, Hawaii, Maui, and Kauai, as well as in the Alaska locations of Anchorage, Kodiak, and Dutch Harbor. In addition, it offers ship management services. The Logistics segment provides multimodal transportation brokerage services, including domestic and international rail intermodal, long-haul and regional highway trucking, specialized hauling, flat-bed and project, less-than-truckload, and expedited freight services; less-than-container load forwarding services; warehousing and distribution services; and supply chain management services. The company was formerly known as Alexander & Baldwin Holdings, Inc. and changed its name to Matson, Inc. in June 2012. Matson, Inc. was founded in 1882 and is headquartered in Honolulu, Hawaii.

Teekay Offshore Partners Company Profile

Teekay Offshore Partners L.P. provides marine transportation, oil production, storage, long-distance towing and offshore installation, and maintenance and safety services for the oil industry. It operates in six segments: Floating Production, Storage and Offloading (FPSO); Shuttle Tanker; Floating Storage and Off-Take (FSO); Unit for Maintenance and Safety (UMS); Towage; and Conventional Tanker. The company serves customers in offshore oil regions of the North Sea, Brazil, and the East Coast of Canada. As at December 31, 2017, it had a fleet of 37 shuttle tankers, 3 chartered-in vessels, 1 HiLoad dynamic positioning unit, 8 FPSO units, 6 FSO units, 10 long-distance towing and offshore installation vessels, 1 UMS, and 2 chartered-in conventional oil tankers. Teekay Offshore GP L.L.C. serves as the general partner of Teekay Offshore Partners L.P. The company was founded in 2006 and is based in Hamilton, Bermuda. Teekay Offshore Partners L.P. is a subsidiary of Brookfield TK TOLP L.P.

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