Danaos (DAC) versus Scorpio Tankers (STNG) Head-To-Head Survey

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Danaos (NYSE:DAC) and Scorpio Tankers (NYSE:STNG) are both small-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Valuation & Earnings

This table compares Danaos and Scorpio Tankers’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Danaos $451.73 million 0.27 $83.90 million $1.05 1.06
Scorpio Tankers $512.73 million 1.13 -$158.24 million ($0.47) -3.70

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

Risk & Volatility

Danaos has a beta of 0.75, meaning that its stock price is 25% less volatile than the S&P 500. Comparatively, Scorpio Tankers has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500.

Insider and Institutional Ownership

1.9% of Danaos shares are owned by institutional investors. Comparatively, 61.3% of Scorpio Tankers shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Danaos and Scorpio Tankers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danaos 14.58% 21.49% 3.98%
Scorpio Tankers -31.44% -9.08% -3.36%

Dividends

Scorpio Tankers pays an annual dividend of $0.04 per share and has a dividend yield of 2.3%. Danaos does not pay a dividend. Scorpio Tankers pays out -8.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations for Danaos and Scorpio Tankers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danaos 0 1 0 0 2.00
Scorpio Tankers 0 0 9 0 3.00

Danaos currently has a consensus target price of $2.00, suggesting a potential upside of 80.18%. Scorpio Tankers has a consensus target price of $4.03, suggesting a potential upside of 131.32%. Given Scorpio Tankers’ stronger consensus rating and higher possible upside, analysts clearly believe Scorpio Tankers is more favorable than Danaos.

Summary

Scorpio Tankers beats Danaos on 9 of the 15 factors compared between the two stocks.

Danaos Company Profile

Danaos Corporation, together with its subsidiaries, owns and operates containerships in Australia, Asia, Europe, and the United States. The company offers seaborne transportation services, such as chartering its vessels to liner companies. As of February 28, 2018, it had a fleet of 55 containerships aggregating 327,616 twenty foot equivalent units. The company was formerly known as Danaos Holdings Limited and changed its name to Danaos Corporation in October 2005. Danaos Corporation was founded in 1972 and is based in Piraeus, Greece.

Scorpio Tankers Company Profile

Scorpio Tankers Inc., together with its subsidiaries, engages in the seaborne transportation of refined petroleum products worldwide. As of March 22, 2018, its fleet consisted of 109 tankers, including 38 LR2, 12 LR1, 45 MR, and 14 Handymax tankers with an average age of approximately 2.6 years; and 20 time or bareboat chartered-in tankers, which include 2 LR2, 10 MR, and 8 Handymax tankers. The company was founded in 2009 and is based in Monaco.

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