Analyzing StealthGas (GASS) & Seaspan Corporation (SSW)

StealthGas (NASDAQ: GASS) and Seaspan Corporation (NYSE:SSW) are both small-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.

Profitability

This table compares StealthGas and Seaspan Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
StealthGas -4.41% 0.44% 0.25%
Seaspan Corporation 14.23% 7.14% 2.28%

Earnings & Valuation

This table compares StealthGas and Seaspan Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
StealthGas $144.13 million 0.99 -$7.79 million ($0.16) -22.38
Seaspan Corporation $877.91 million 0.86 -$139.03 million $0.45 13.60

StealthGas has higher revenue, but lower earnings than Seaspan Corporation. StealthGas is trading at a lower price-to-earnings ratio than Seaspan Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

StealthGas has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500. Comparatively, Seaspan Corporation has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for StealthGas and Seaspan Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
StealthGas 0 0 1 0 3.00
Seaspan Corporation 3 5 0 0 1.63

StealthGas presently has a consensus target price of $7.00, indicating a potential upside of 95.53%. Seaspan Corporation has a consensus target price of $6.79, indicating a potential upside of 10.88%. Given StealthGas’ stronger consensus rating and higher probable upside, equities analysts clearly believe StealthGas is more favorable than Seaspan Corporation.

Insider and Institutional Ownership

64.3% of StealthGas shares are owned by institutional investors. Comparatively, 15.2% of Seaspan Corporation shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

Seaspan Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 8.2%. StealthGas does not pay a dividend. Seaspan Corporation pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. StealthGas has raised its dividend for 5 consecutive years.

Summary

StealthGas beats Seaspan Corporation on 10 of the 16 factors compared between the two stocks.

About StealthGas

StealthGas Inc. is a provider of international seaborne transportation services to liquefied petroleum gas (LPG) producers and users, as well as crude oil and product carriers to oil producers, refineries and commodities traders. The Company owns a fleet of LPG carriers. Its LPG carriers carry various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of crude oil and natural gas. The medium range product carriers in its fleet are capable of carrying refined petroleum products, such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, while its Aframax tanker is used for carrying crude oil. Its fleet consists of approximately 50 LPG carriers, including two chartered-in LPG carriers, two 2008-built product carriers, a 2009-built product carrier and a 2010-built Aframax crude oil tanker.

About Seaspan Corporation

Seaspan Corporation is an independent charter owner and manager of containerships. The Company charters pursuant to long-term, fixed-rate time charters with various container liner companies. As of February 20, 2017, it had operated a fleet of 88 containerships and had entered into contracts for the purchase of an additional eight new building containerships. Its operating vessels include YM Wish, YM Wellhead, YM Witness, COSCO Glory, COSCO Development, COSCO Harmony, COSCO Excellence, COSCO Hope, COSCO Fortune, Seaspan Yangtze, CSCL Zeebrugge, CSCL Long Beach, CSCL Oceania, COSCO Vietnam, MOL Emissary, Seaspan Chiwan, Seaspan Ningbo, Seaspan Felixstowe, CSCL Brisbane, Seaspan Santos, Seaspan Loncomilla, Seaspan Lingue, CSCL Montevideo, CSCL Callao, Guayaquil Bridge and Calicanto Bridge. The Company is engaged in the operation and management of vessel, including maintaining the vessel, periodic dry-docking, cleaning and painting and performing work required by regulations.

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