Contrasting Ardmore Shipping (ASC) & Star Bulk Carriers (SBLK)

Ardmore Shipping (NYSE: ASC) and Star Bulk Carriers (NASDAQ:SBLK) are both small-cap transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Ardmore Shipping and Star Bulk Carriers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ardmore Shipping 0 1 3 0 2.75
Star Bulk Carriers 0 1 6 0 2.86

Ardmore Shipping presently has a consensus target price of $10.38, suggesting a potential upside of 29.69%. Star Bulk Carriers has a consensus target price of $13.20, suggesting a potential upside of 17.23%. Given Ardmore Shipping’s higher probable upside, analysts clearly believe Ardmore Shipping is more favorable than Star Bulk Carriers.

Volatility & Risk

Ardmore Shipping has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Star Bulk Carriers has a beta of 2.74, suggesting that its share price is 174% more volatile than the S&P 500.

Institutional & Insider Ownership

75.6% of Ardmore Shipping shares are held by institutional investors. Comparatively, 70.4% of Star Bulk Carriers shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Ardmore Shipping and Star Bulk Carriers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ardmore Shipping -6.45% -3.08% -1.41%
Star Bulk Carriers -23.09% -4.04% -2.05%

Earnings & Valuation

This table compares Ardmore Shipping and Star Bulk Carriers’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ardmore Shipping $164.40 million 1.63 $3.74 million ($0.37) -21.62
Star Bulk Carriers $222.11 million 3.25 -$154.22 million ($1.12) -10.05

Ardmore Shipping has higher earnings, but lower revenue than Star Bulk Carriers. Ardmore Shipping is trading at a lower price-to-earnings ratio than Star Bulk Carriers, indicating that it is currently the more affordable of the two stocks.

Summary

Ardmore Shipping beats Star Bulk Carriers on 7 of the 12 factors compared between the two stocks.

About Ardmore Shipping

Ardmore Shipping Corporation provides seaborne transportation of petroleum products and chemicals to national oil companies, oil and chemical traders, and chemical companies, with its fleet of mid-size product and chemical tankers. The Company’s segment relates to the operations of its vessels. The Company’s fleet consists of over 20 double-hulled product and chemical tankers, all of which are in operation. The Company’s vessels include Ardmore Seavaliant, Ardmore Seaventure, Ardmore Seavantage, Ardmore Seavanguard, Ardmore Sealion, Ardmore Seafox, Ardmore Seahawk, Ardmore Endeavour, Ardmore Seafarer, Ardmore Seatrader, Ardmore Seamaster and Ardmore Sealeader. The Company has over 30 subsidiaries, the majority of which represent single ship-owning companies for its fleet. Its subsidiaries include Ardmore Shipping (Bermuda) Limited (ASBL), Ardmore Shipping Services (Ireland) Limited (ASSIL), Ardmore Shipping (Asia) Pte. Limited and Ardmore Shipping (Americas) LLC.

About Star Bulk Carriers

Star Bulk Carriers Corp. is an international shipping company. The Company owns and operates a fleet of dry bulk carrier vessels. As of December 31, 2016, the Company’s fleet included 73 vessels consisting primarily of Newcastlemax and Capesize, as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 52,055 and 209,537 deadweight tonnage (dwt). The Company’s vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes across the world. The Company’s fleet, which emphasizes Capesize vessels, primarily transports minerals from the Americas and Australia to East Asia, particularly China, as well as Japan, South Korea, Taiwan, Indonesia and Malaysia. The Company’s Supramax vessels carry minerals, grain products and steel between the Americas, Europe, Africa, Australia and Indonesia, and from these areas to China, Japan, South Korea, Taiwan, the Philippines and Malaysia.

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