Seaspan Corporation (NYSE: SSW) and Ardmore Shipping Corporation (NYSE:ASC) are both small-cap transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Seaspan Corporation and Ardmore Shipping Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Seaspan Corporation 3 6 0 0 1.67
Ardmore Shipping Corporation 0 2 5 0 2.71

Seaspan Corporation presently has a consensus price target of $6.79, indicating a potential upside of 5.04%. Ardmore Shipping Corporation has a consensus price target of $9.88, indicating a potential upside of 36.21%. Given Ardmore Shipping Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Ardmore Shipping Corporation is more favorable than Seaspan Corporation.

Volatility & Risk

Seaspan Corporation has a beta of 0.67, suggesting that its share price is 33% less volatile than the S&P 500. Comparatively, Ardmore Shipping Corporation has a beta of 1.35, suggesting that its share price is 35% more volatile than the S&P 500.

Insider and Institutional Ownership

13.4% of Seaspan Corporation shares are held by institutional investors. Comparatively, 76.5% of Ardmore Shipping Corporation shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Seaspan Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 7.7%. Ardmore Shipping Corporation pays an annual dividend of $0.11 per share and has a dividend yield of 1.5%. Seaspan Corporation pays out -29.9% of its earnings in the form of a dividend. Ardmore Shipping Corporation pays out -29.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Seaspan Corporation has raised its dividend for 5 consecutive years and Ardmore Shipping Corporation has raised its dividend for 3 consecutive years. Seaspan Corporation is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Seaspan Corporation and Ardmore Shipping Corporation’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Seaspan Corporation $844.00 million 0.90 $501.00 million ($1.67) -3.87
Ardmore Shipping Corporation $180.66 million 1.35 $43.97 million ($0.37) -19.59

Seaspan Corporation has higher revenue and earnings than Ardmore Shipping Corporation. Ardmore Shipping Corporation is trading at a lower price-to-earnings ratio than Seaspan Corporation, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Seaspan Corporation and Ardmore Shipping Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Seaspan Corporation -13.54% 7.51% 2.36%
Ardmore Shipping Corporation -6.92% -2.35% -1.08%

Summary

Ardmore Shipping Corporation beats Seaspan Corporation on 8 of the 15 factors compared between the two stocks.

About Seaspan Corporation

Seaspan Corporation is an independent charter owner and manager of containerships. The Company charters pursuant to long-term, fixed-rate time charters with various container liner companies. As of February 20, 2017, it had operated a fleet of 88 containerships and had entered into contracts for the purchase of an additional eight new building containerships. Its operating vessels include YM Wish, YM Wellhead, YM Witness, COSCO Glory, COSCO Development, COSCO Harmony, COSCO Excellence, COSCO Hope, COSCO Fortune, Seaspan Yangtze, CSCL Zeebrugge, CSCL Long Beach, CSCL Oceania, COSCO Vietnam, MOL Emissary, Seaspan Chiwan, Seaspan Ningbo, Seaspan Felixstowe, CSCL Brisbane, Seaspan Santos, Seaspan Loncomilla, Seaspan Lingue, CSCL Montevideo, CSCL Callao, Guayaquil Bridge and Calicanto Bridge. The Company is engaged in the operation and management of vessel, including maintaining the vessel, periodic dry-docking, cleaning and painting and performing work required by regulations.

About Ardmore Shipping Corporation

Ardmore Shipping Corporation provides seaborne transportation of petroleum products and chemicals to national oil companies, oil and chemical traders, and chemical companies, with its fleet of mid-size product and chemical tankers. The Company’s segment relates to the operations of its vessels. The Company’s fleet consists of over 20 double-hulled product and chemical tankers, all of which are in operation. The Company’s vessels include Ardmore Seavaliant, Ardmore Seaventure, Ardmore Seavantage, Ardmore Seavanguard, Ardmore Sealion, Ardmore Seafox, Ardmore Seahawk, Ardmore Endeavour, Ardmore Seafarer, Ardmore Seatrader, Ardmore Seamaster and Ardmore Sealeader. The Company has over 30 subsidiaries, the majority of which represent single ship-owning companies for its fleet. Its subsidiaries include Ardmore Shipping (Bermuda) Limited (ASBL), Ardmore Shipping Services (Ireland) Limited (ASSIL), Ardmore Shipping (Asia) Pte. Limited and Ardmore Shipping (Americas) LLC.

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