Frontline (NYSE:FRO) and Genco Shipping & Trading (NYSE:GNK) are both small-cap transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.
Earnings & Valuation
This table compares Frontline and Genco Shipping & Trading's top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Frontline | $957.32 million | 1.54 | $139.97 million | $0.82 | 9.10 |
| Genco Shipping & Trading | $389.50 million | 1.48 | $-55,990,000.00 | ($0.67) | -20.52 |
Frontline has higher revenue and earnings than Genco Shipping & Trading. Genco Shipping & Trading is trading at a lower price-to-earnings ratio than Frontline, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Frontline and Genco Shipping & Trading's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Frontline | 38.35% | 34.28% | 13.95% |
| Genco Shipping & Trading | -43.05% | -2.43% | -1.51% |
Dividends
Frontline pays an annual dividend of $1.20 per share and has a dividend yield of 16.1%. Genco Shipping & Trading pays an annual dividend of $0.08 per share and has a dividend yield of 0.6%. Frontline pays out 146.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Genco Shipping & Trading pays out -11.9% of its earnings in the form of a dividend. Genco Shipping & Trading has increased its dividend for 1 consecutive years.
Insider and Institutional Ownership
21.9% of Frontline shares are held by institutional investors. Comparatively, 79.6% of Genco Shipping & Trading shares are held by institutional investors. 48.1% of Frontline shares are held by company insiders. Comparatively, 1.8% of Genco Shipping & Trading shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Risk and Volatility
Frontline has a beta of 0.47, indicating that its stock price is 53% less volatile than the S&P 500. Comparatively, Genco Shipping & Trading has a beta of 0.91, indicating that its stock price is 9% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of current ratings and target prices for Frontline and Genco Shipping & Trading, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Frontline | 2 | 6 | 1 | 0 | 1.89 |
| Genco Shipping & Trading | 0 | 1 | 5 | 0 | 2.83 |
Frontline currently has a consensus target price of $7.8080, suggesting a potential upside of 4.66%. Genco Shipping & Trading has a consensus target price of $35.4833, suggesting a potential upside of 158.06%. Given Genco Shipping & Trading's stronger consensus rating and higher possible upside, analysts clearly believe Genco Shipping & Trading is more favorable than Frontline.
Summary
Frontline beats Genco Shipping & Trading on 10 of the 17 factors compared between the two stocks.
