Safe Bulkers (NYSE: SB) and Capital Product Partners L.P. (NASDAQ:CPLP) are both small-cap transportation companies, but which is the superior business? We will compare the two businesses based on the strength of their valuation, earnings, risk, analyst recommendations, dividends, institutional ownership and profitabiliy.

Dividends

Capital Product Partners L.P. pays an annual dividend of $0.32 per share and has a dividend yield of 8.6%. Safe Bulkers does not pay a dividend. Capital Product Partners L.P. pays out 94.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Capital Product Partners L.P. has raised its dividend for 3 consecutive years.

Valuation and Earnings

This table compares Safe Bulkers and Capital Product Partners L.P.’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Safe Bulkers $118.40 million 1.95 $52.14 million ($0.65) -3.58
Capital Product Partners L.P. N/A N/A N/A $0.34 11.00

Safe Bulkers has higher revenue and earnings than Capital Product Partners L.P.. Safe Bulkers is trading at a lower price-to-earnings ratio than Capital Product Partners L.P., indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

15.3% of Safe Bulkers shares are held by institutional investors. Comparatively, 18.1% of Capital Product Partners L.P. shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Safe Bulkers has a beta of 2.38, indicating that its stock price is 138% more volatile than the S&P 500. Comparatively, Capital Product Partners L.P. has a beta of 1.62, indicating that its stock price is 62% more volatile than the S&P 500.

Profitability

This table compares Safe Bulkers and Capital Product Partners L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safe Bulkers -35.00% -4.35% -2.13%
Capital Product Partners L.P. 20.36% 5.53% 3.13%

Analyst Ratings

This is a breakdown of recent ratings for Safe Bulkers and Capital Product Partners L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safe Bulkers 1 5 2 0 2.13
Capital Product Partners L.P. 0 1 4 0 2.80

Safe Bulkers currently has a consensus target price of $1.80, indicating a potential downside of 22.75%. Capital Product Partners L.P. has a consensus target price of $4.75, indicating a potential upside of 27.01%. Given Capital Product Partners L.P.’s stronger consensus rating and higher probable upside, analysts plainly believe Capital Product Partners L.P. is more favorable than Safe Bulkers.

Summary

Capital Product Partners L.P. beats Safe Bulkers on 10 of the 13 factors compared between the two stocks.

Safe Bulkers Company Profile

Safe Bulkers, Inc. is a holding company. The Company’s principal business is the acquisition, ownership and operation of drybulk vessels. The Company’s vessels operate across the world, carrying drybulk cargo for the consumers of marine drybulk transportation services. The Company is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along shipping routes across the world. As of February 17, 2017 the Company’s fleet included 38 vessels, of which 14 are Panamax class vessels, nine are Kamsarmax class vessels, 12 are Post-Panamax class vessels and three are Capesize class vessels, with an aggregate carrying capacity of 3,421,800 deadweight tonnage (dwt). The Company’s fleet of Post-Panamax vessels includes Marina, Xenia, Sophia, Eleni, Martine, Andreas K, Panayiota K, Venus Heritage, Venus History, Venus Horizon and Troodos Sun. Its fleet of Capesize vessels includes Kanaris, Pelopidas and Lake Despina.

Capital Product Partners L.P. Company Profile

Capital Product Partners L.P. is an international owner of tanker, container and drybulk vessels. The Company’s fleet consisted of 36 high specification vessels with an average age of approximately 7.4 years, as of December 31, 2016. As of December 31, 2016, its fleet consisted of four Suezmax crude oil tankers, 21 medium range product tankers, 10 post-panamax container carrier vessels and one Capesize bulk carrier. The Company’s vessels are capable of carrying a range of cargoes, including crude oil, refined oil products, such as gasoline, diesel, fuel oil and jet fuel, edible oils and certain chemicals, such as ethanol, as well as dry cargo and containerized goods. Its fleet consists of product tankers, such as Aktoras, Aiolos, Agisilaos, Akeraios and Apostolos; crude tankers, such as Amoureux, Aias, Amore Mio II and Miltiadis M II; drybulk vessels, such as Cape Agamemnon, and container carrier vessels, such as Archimidis, Agamemnon and Hyundai Platinum.

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