Analyzing KNOT Offshore Partners (KNOP) & Dorian LPG (LPG)
KNOT Offshore Partners (NYSE: KNOP) and Dorian LPG (NYSE:LPG) are both small-cap energy companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, profitabiliy, dividends, risk and earnings.
KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 9.2%. Dorian LPG does not pay a dividend. KNOT Offshore Partners pays out 89.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Dorian LPG has raised its dividend for 3 consecutive years.
This is a breakdown of current ratings and price targets for KNOT Offshore Partners and Dorian LPG, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|KNOT Offshore Partners||0||2||0||0||2.00|
KNOT Offshore Partners presently has a consensus target price of $20.00, suggesting a potential downside of 11.70%. Dorian LPG has a consensus target price of $10.00, suggesting a potential upside of 41.84%. Given Dorian LPG’s stronger consensus rating and higher probable upside, analysts clearly believe Dorian LPG is more favorable than KNOT Offshore Partners.
Volatility & Risk
KNOT Offshore Partners has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Dorian LPG has a beta of 1.17, suggesting that its stock price is 17% more volatile than the S&P 500.
Valuation and Earnings
This table compares KNOT Offshore Partners and Dorian LPG’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|KNOT Offshore Partners||$175.49 million||3.87||$133.46 million||$2.33||9.72|
|Dorian LPG||$157.40 million||2.41||$66.09 million||($0.12)||-58.75|
KNOT Offshore Partners has higher revenue and earnings than Dorian LPG. Dorian LPG is trading at a lower price-to-earnings ratio than KNOT Offshore Partners, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
49.3% of KNOT Offshore Partners shares are held by institutional investors. Comparatively, 47.6% of Dorian LPG shares are held by institutional investors. 26.8% of Dorian LPG shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares KNOT Offshore Partners and Dorian LPG’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|KNOT Offshore Partners||25.40%||8.55%||3.35%|
KNOT Offshore Partners beats Dorian LPG on 9 of the 16 factors compared between the two stocks.
KNOT Offshore Partners Company Profile
KNOT Offshore Partners LP (KNOT Offshore Partners or the Partnership), owns, operates and acquires shuttle tankers under long-term charters. The Partnership’s vessels in its fleet are chartered to Statoil ASA (Statoil), Petrobras Transporte S.A. (Transpetro), Repsol Sinopec Brasil, S.A. (Repsol), Royal Dutch Shell plc, ExxonMobil, and Eni Trading and Shipping S.p.A. (ENI). As of March 17, 2017, the Company had a fleet of 12 shuttle tankers. Its shuttle tankers include Fortaleza Knutsen, Recife Knutsen, Bodil Knutsen and Dan Cisne. KNOT Offshore Partners GP LLC is the general partner of the Partnership. It is engaged in the loading, transportation and storage of the crude oil using the vessels in its fleet. It provides all of these services under time charters and bareboat charters. As of December 31, 2016, eight of its shuttle tankers were chartered under time charters and four of its shuttle tankers were chartered under bareboat charters.
Dorian LPG Company Profile
Dorian LPG Ltd. is a holding company. The Company, through its subsidiaries, is focused on owning and operating very large gas carrier (VLGCs) in the liquefied petroleum gas (LPG) shipping industry. The Company is engaged in the transportation of LPG across the world through its ownership and operation of LPG tankers. As of March 31, 2016, the Company owned and operated a fleet of 22 VLGCs, including 19 84,000 cubic meter (cbm) ECO-design VLGCs (ECO VLGCs) and three 82,000 cbm VLGCs. The VLGCs in its fleet had an aggregate carrying capacity of approximately 1.8 million cbm at May 26, 2016. It provides in-house commercial and technical management services for all of its vessels. As of May 26, 2016, its VLGCs included Captain Nicholas ML; Captain John NP; Comet; Corsair; Corvette; Cougar; Concorde; Cobra; Continental; Commodore; Constellation; Cheyenne; Cratis; Chaparral; Commander, and Challenger. The Company’s customers include global energy companies, commodity traders and importers.
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