Teekay Corporation (NYSE: TK) and Nordic American Tankers Limited (NYSE:NAT) are both small-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, profitabiliy, earnings, valuation, analyst recommendations, risk and institutional ownership.

Insider and Institutional Ownership

46.5% of Teekay Corporation shares are held by institutional investors. Comparatively, 27.0% of Nordic American Tankers Limited shares are held by institutional investors. 2.4% of Teekay Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Teekay Corporation pays an annual dividend of $0.22 per share and has a dividend yield of 2.2%. Nordic American Tankers Limited pays an annual dividend of $0.80 per share and has a dividend yield of 14.0%. Teekay Corporation pays out -15.4% of its earnings in the form of a dividend. Nordic American Tankers Limited pays out 4,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nordic American Tankers Limited has increased its dividend for 2 consecutive years. Nordic American Tankers Limited is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Teekay Corporation and Nordic American Tankers Limited’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teekay Corporation -5.66% -2.80% -0.87%
Nordic American Tankers Limited 0.06% 0.25% 0.16%

Volatility & Risk

Teekay Corporation has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, Nordic American Tankers Limited has a beta of 0.95, suggesting that its stock price is 5% less volatile than the S&P 500.

Valuation and Earnings

This table compares Teekay Corporation and Nordic American Tankers Limited’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Teekay Corporation $2.23 billion 0.38 $923.65 million ($1.43) -6.92
Nordic American Tankers Limited $335.91 million 1.73 $113.60 million $0.02 285.50

Teekay Corporation has higher revenue and earnings than Nordic American Tankers Limited. Teekay Corporation is trading at a lower price-to-earnings ratio than Nordic American Tankers Limited, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for Teekay Corporation and Nordic American Tankers Limited, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teekay Corporation 1 3 0 0 1.75
Nordic American Tankers Limited 3 4 0 0 1.57

Teekay Corporation currently has a consensus target price of $5.33, suggesting a potential downside of 46.13%. Nordic American Tankers Limited has a consensus target price of $7.08, suggesting a potential upside of 24.05%. Given Nordic American Tankers Limited’s higher probable upside, analysts clearly believe Nordic American Tankers Limited is more favorable than Teekay Corporation.

Summary

Nordic American Tankers Limited beats Teekay Corporation on 8 of the 15 factors compared between the two stocks.

Teekay Corporation Company Profile

Teekay Corporation (Teekay) is a provider of crude oil and gas marine transportation services. The Company also offers offshore oil production, storage and offloading services, primarily under long-term, fixed-rate contracts. The Company is engaged in the liquefied natural gas (LNG) and liquefied petroleum gas (LPG) shipping sectors, as well as in the operations in the offshore production, storage and transportation sector. It is also involved in the conventional tanker business. Teekay provides a set of marine services to the oil and gas companies. The Company has four lines of business: offshore logistics (shuttle tankers, the HiLoad DP unit, floating storage and off-take (FSO) units, units for maintenance and safety (UMS), and long-distance towing and offshore installation vessels), offshore production (floating production, storage and offloading (FPSO) units), liquefied gas carriers and conventional tankers.

Nordic American Tankers Limited Company Profile

Nordic American Tankers Limited is an international tanker company. The Company owns approximately 26 vessels, including approximately two new buildings under construction, of approximately 156,000 deadweight tonnage (dwt) each. The Company’s Suezmaxes tankers can carry over one million barrels of oil. The vessels in the Company’s fleet are homogenous and interchangeable. The Company’s vessels are employed in the spot market. The Company’s vessels include Nordic Harrier, Nordic Hawk, Nordic Hunter, Nordic Voyager, Nordic Fighter, Nordic Freedom, Nordic Discovery, Nordic Saturn, Nordic Jupiter, Nordic Moon, Nordic Apollo, Nordic Cosmos, Nordic Sprite, Nordic Mistral, Nordic Passat, Nordic Vega, Nordic Breeze, Nordic Zenith, Nordic Sprinter, Nordic Skier and Nordic Light.

Receive News & Ratings for Teekay Corporation Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Teekay Corporation and related companies with MarketBeat.com's FREE daily email newsletter.