Safe Bulkers (NYSE: SB) and Scorpio Bulkers (NYSE:SALT) are both small-cap transportation companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, earnings, profitabiliy, risk, analyst recommendations, valuation and dividends.

Earnings & Valuation

This table compares Safe Bulkers and Scorpio Bulkers’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Safe Bulkers $118.40 million 2.21 $52.14 million ($0.65) -4.05
Scorpio Bulkers $102.89 million 5.30 -$17.16 million ($1.26) -6.03

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

Volatility and Risk

Safe Bulkers has a beta of 2.38, indicating that its stock price is 138% more volatile than the S&P 500. Comparatively, Scorpio Bulkers has a beta of 3.68, indicating that its stock price is 268% more volatile than the S&P 500.

Insider and Institutional Ownership

15.2% of Safe Bulkers shares are held by institutional investors. Comparatively, 48.0% of Scorpio Bulkers shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Safe Bulkers and Scorpio Bulkers’ 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%
Scorpio Bulkers -72.87% -7.45% -4.56%

Analyst Recommendations

This is a summary of recent ratings and price targets for Safe Bulkers and Scorpio Bulkers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safe Bulkers 1 5 2 0 2.13
Scorpio Bulkers 0 2 5 0 2.71

Safe Bulkers currently has a consensus price target of $1.95, indicating a potential downside of 25.86%. Scorpio Bulkers has a consensus price target of $8.18, indicating a potential upside of 7.61%. Given Scorpio Bulkers’ stronger consensus rating and higher possible upside, analysts plainly believe Scorpio Bulkers is more favorable than Safe Bulkers.

About Safe Bulkers

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.

About Scorpio Bulkers

Scorpio Bulkers Inc. is a shipping company. The Company owns and operates newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 deadweight tons (dwt). The Company operates through two segments: Kamsarmax and Ultramax. Its Kamsarmax segment includes vessels ranging from approximately 77,500 DWT to 98,700 DWT. Its Ultramax segment includes vessels ranging from approximately 60,200 DWT to 64,000 DWT. All of its owned vessels have carrying capacities of greater than 60,000 dwt. Its vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes, and are employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of December 31, 2016, its operating fleet of 48 vessels consisted of 47 drybulk vessels and one chartered-in drybulk vessel. It also has a contract for the construction of one newbuilding drybulk vessel.

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