Teekay Corporation (NYSE: TK) and Scorpio Tankers (NASDAQ:STNG) are both small-cap transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitabiliy.

Profitability

This table compares Teekay Corporation and Scorpio Tankers’ 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%
Scorpio Tankers -9.39% -3.53% -1.41%

Earnings & Valuation

This table compares Teekay Corporation and Scorpio Tankers’ revenue, earnings per share 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
Scorpio Tankers $480.42 million 1.20 $144.97 million N/A N/A

Teekay Corporation has higher revenue and earnings than Scorpio Tankers.

Institutional and Insider Ownership

46.5% of Teekay Corporation shares are owned by institutional investors. 2.4% of Teekay Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Teekay Corporation and Scorpio Tankers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teekay Corporation 1 3 0 0 1.75
Scorpio Tankers 0 1 10 0 2.91

Teekay Corporation currently has a consensus price target of $5.33, suggesting a potential downside of 46.13%. Scorpio Tankers has a consensus price target of $6.44, suggesting a potential upside of 82.05%. Given Scorpio Tankers’ stronger consensus rating and higher probable upside, analysts clearly believe Scorpio Tankers is more favorable than Teekay Corporation.

Dividends

Teekay Corporation pays an annual dividend of $0.22 per share and has a dividend yield of 2.2%. Scorpio Tankers does not pay a dividend. Teekay Corporation pays out -15.4% of its earnings in the form of a dividend. Scorpio Tankers has raised its dividend for 2 consecutive years.

Summary

Teekay Corporation beats Scorpio Tankers on 9 of the 14 factors compared between the two stocks.

About Teekay Corporation

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.

About Scorpio Tankers

Scorpio Tankers Inc. (Scorpio Tankers) is engaged in the seaborne transportation of refined petroleum products in the international shipping markets. The Company operates through four segments: Handymax, MR, LR1/Panamax and LR2. As of March 15, 2017, the Company’s fleet consisted of 78 owned tankers (22 LR2, 14 Handymax and 42 MR) with a weighted average age of approximately 2.3 years, and 19 time or bareboat chartered-in tankers, which it operated (one LR2, one LR1, eight MR and nine Handymax) (collectively referred to as its Operating Fleet). As of March 1, 2017, the Company’s total oil tanker fleet (crude, products and product/chemical tankers) consisted of 4,754 ships with a combined capacity of 525.9 million deadweight tonnage. As of December 31, 2016, the Company also had contracts for the construction of one LR2 tanker and eight MR tankers. Its vessels include STI Brixton, STI Comandante, STI Finchley, STI Hammersmith, STI Larvotto, STI San Antonio and STI Regina.

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