Matson (NYSE:MATX) and Teekay LNG Partners (NYSE:TGP) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, profitability, analyst recommendations, earnings and risk.
Dividends
Matson pays an annual dividend of $0.92 per share and has a dividend yield of 1.3%. Teekay LNG Partners pays an annual dividend of $1.00 per share and has a dividend yield of 6.9%. Matson pays out 48.2% of its earnings in the form of a dividend. Teekay LNG Partners pays out 55.9% 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. Matson has raised its dividend for 8 consecutive years and Teekay LNG Partners has raised its dividend for 2 consecutive years.
Insider & Institutional Ownership
86.6% of Matson shares are owned by institutional investors. Comparatively, 23.1% of Teekay LNG Partners shares are owned by institutional investors. 2.0% of Matson shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
Profitability
This table compares Matson and Teekay LNG Partners' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Matson | 5.54% | 14.86% | 4.37% |
Teekay LNG Partners | 20.41% | 15.23% | 4.38% |
Valuation & Earnings
This table compares Matson and Teekay LNG Partners' gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Matson | $1.67 billion | 1.81 | $82.70 million | $1.91 | 36.44 |
Teekay LNG Partners | $601.26 million | 2.10 | $152.79 million | $1.79 | 8.11 |
Teekay LNG Partners has lower revenue, but higher earnings than Matson. Teekay LNG Partners is trading at a lower price-to-earnings ratio than Matson, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a summary of current recommendations and price targets for Matson and Teekay LNG Partners, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Matson | 0 | 0 | 3 | 0 | 3.00 |
Teekay LNG Partners | 0 | 1 | 1 | 0 | 2.50 |
Matson currently has a consensus price target of $61.6667, indicating a potential downside of 11.40%. Teekay LNG Partners has a consensus price target of $14.75, indicating a potential upside of 1.58%. Given Teekay LNG Partners' higher probable upside, analysts plainly believe Teekay LNG Partners is more favorable than Matson.
Risk & Volatility
Matson has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, Teekay LNG Partners has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.
Summary
Matson beats Teekay LNG Partners on 9 of the 17 factors compared between the two stocks.