Teekay LNG Partners (NYSE:TGP) and International Seaways (NYSE:INSW) are both small-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.
Analyst Recommendations
This is a summary of recent ratings and recommmendations for Teekay LNG Partners and International Seaways, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Teekay LNG Partners | 0 | 1 | 1 | 0 | 2.50 |
| International Seaways | 1 | 2 | 4 | 0 | 2.43 |
Teekay LNG Partners currently has a consensus target price of $14.75, indicating a potential downside of 0.34%. International Seaways has a consensus target price of $26.00, indicating a potential upside of 41.15%. Given International Seaways' higher probable upside, analysts clearly believe International Seaways is more favorable than Teekay LNG Partners.
Valuation & Earnings
This table compares Teekay LNG Partners and International Seaways' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Teekay LNG Partners | $601.26 million | 2.14 | $152.79 million | $1.79 | 8.27 |
| International Seaways | $366.18 million | 1.41 | $-830,000.00 | $0.61 | 30.20 |
Teekay LNG Partners has higher revenue and earnings than International Seaways. Teekay LNG Partners is trading at a lower price-to-earnings ratio than International Seaways, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Teekay LNG Partners and International Seaways' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Teekay LNG Partners | 20.41% | 15.23% | 4.38% |
| International Seaways | 26.02% | 16.95% | 10.25% |
Risk and Volatility
Teekay LNG Partners has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, International Seaways has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.
Insider and Institutional Ownership
23.1% of Teekay LNG Partners shares are owned by institutional investors. Comparatively, 77.1% of International Seaways shares are owned by institutional investors. 2.4% of International Seaways shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Dividends
Teekay LNG Partners pays an annual dividend of $1.00 per share and has a dividend yield of 6.8%. International Seaways pays an annual dividend of $0.24 per share and has a dividend yield of 1.3%. Teekay LNG Partners pays out 55.9% of its earnings in the form of a dividend. International Seaways pays out 39.3% 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 LNG Partners has increased its dividend for 2 consecutive years and International Seaways has increased its dividend for 1 consecutive years. Teekay LNG Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Summary
Teekay LNG Partners beats International Seaways on 9 of the 17 factors compared between the two stocks.
