Teekay (NYSE:TK) and Scorpio Bulkers (NYSE:SALT) are both small-cap transportation companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, profitability, dividends, institutional ownership, valuation, analyst recommendations and earnings.
Teekay pays an annual dividend of $0.22 per share and has a dividend yield of 3.2%. Scorpio Bulkers pays an annual dividend of $0.08 per share and has a dividend yield of 1.1%. Teekay pays out -15.9% of its earnings in the form of a dividend. Scorpio Bulkers pays out -14.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Teekay is clearly the better dividend stock, given its higher yield and lower payout ratio.
This table compares Teekay and Scorpio Bulkers’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
29.1% of Teekay shares are owned by institutional investors. Comparatively, 38.6% of Scorpio Bulkers shares are owned by institutional investors. 2.4% of Teekay shares are owned 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.
Volatility and Risk
Teekay has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500. Comparatively, Scorpio Bulkers has a beta of 3.02, meaning that its share price is 202% more volatile than the S&P 500.
This is a breakdown of recent recommendations and price targets for Teekay and Scorpio Bulkers, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Teekay presently has a consensus target price of $7.25, suggesting a potential upside of 5.99%. Scorpio Bulkers has a consensus target price of $10.33, suggesting a potential upside of 41.36%. Given Scorpio Bulkers’ stronger consensus rating and higher probable upside, analysts clearly believe Scorpio Bulkers is more favorable than Teekay.
Earnings & Valuation
This table compares Teekay and Scorpio Bulkers’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Teekay||$1.88 billion||0.37||-$163.27 million||($1.38)||-4.96|
|Scorpio Bulkers||$162.21 million||3.42||-$59.72 million||($0.57)||-12.82|
Scorpio Bulkers has lower revenue, but higher earnings than Teekay. Scorpio Bulkers is trading at a lower price-to-earnings ratio than Teekay, indicating that it is currently the more affordable of the two stocks.
Scorpio Bulkers beats Teekay on 10 of the 16 factors compared between the two stocks.
Teekay Corporation provides crude oil and gas marine transportation; offshore oil production; and storage and offloading services in Bermuda and internationally. It operates shuttle tankers, floating storage and offloading (FSO) units, HiLoad dynamic positioning units, and long-distance towing and offshore installation vessels, as well as offers offshore accommodation, storage, and support for maintenance and modification projects. The company also operates floating production, storage, and offloading (FPSO) units, as well as other vessels used to service its FPSO contracts; liquefied natural gas (LNG) and liquefied petroleum gas carriers; and conventional crude oil and product tankers. As of December 31, 2017, its fleet consisted of 217 vessels. The company serves energy and utility companies, oil traders, large oil and LNG consumers, petroleum product producers, government agencies, and various other entities that depend upon marine transportation. Teekay Corporation was founded in 1973 and is based in Hamilton, Bermuda.
About Scorpio Bulkers
Scorpio Bulkers Inc., a shipping company, owns and operates dry bulk carriers. Its vessels transport a range of bulk commodities, including ores, coal, grains, and fertilizers along worldwide shipping routes. As of December 31, 2017, the company owned or finance leased 55 vessels comprising 18 Kamsarmax vessels and 37 Ultramax vessels. Scorpio Bulkers Inc. was founded in 2013 and is based in Monaco, Monaco.
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