KNOT Offshore Partners (NYSE: KNOP) and Hoegh LNG Partners (NASDAQ:HMLP) are both small-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, dividends, analyst recommendations and risk.

Profitability

This table compares KNOT Offshore Partners and Hoegh LNG Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KNOT Offshore Partners 35.75% 10.26% 4.31%
Hoegh LNG Partners 106.97% 33.57% 13.00%

Valuation & Earnings

This table compares KNOT Offshore Partners and Hoegh LNG Partners’ gross 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 3.88 $133.46 million $2.39 9.60
Hoegh LNG Partners $104.51 million 5.72 $78.26 million N/A N/A

KNOT Offshore Partners has higher revenue and earnings than Hoegh LNG Partners.

Insider & Institutional Ownership

51.4% of KNOT Offshore Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations for KNOT Offshore Partners and Hoegh LNG Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KNOT Offshore Partners 0 2 0 0 2.00
Hoegh LNG Partners 0 0 5 0 3.00

KNOT Offshore Partners presently has a consensus target price of $20.00, suggesting a potential downside of 12.85%. Hoegh LNG Partners has a consensus target price of $21.38, suggesting a potential upside of 17.77%. Given Hoegh LNG Partners’ stronger consensus rating and higher probable upside, analysts clearly believe Hoegh LNG Partners is more favorable than KNOT Offshore Partners.

Dividends

KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 9.1%. Hoegh LNG Partners does not pay a dividend. KNOT Offshore Partners pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KNOT Offshore Partners has increased its dividend for 3 consecutive years.

Summary

Hoegh LNG Partners beats KNOT Offshore Partners on 8 of the 14 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.

Hoegh LNG Partners Company Profile

Hoegh LNG Partners LP owns, operates and acquires floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers and other LNG infrastructure assets under long-term charters. The Company’s segments include Majority held FSRUs, Joint venture FSRUs and other. The Majority held FSRUs segment includes the direct financing lease related to the PT Perusahaan Gas Negara (Persero) Tbk (PGN) FSRU Lampung and the operating lease related to the Hoegh Gallant. The Joint venture FSRUs segment includes approximately two FSRUs, including the GDF Suez LNG Supply S.A. (GDF Suez) Neptune and the GDF Suez Cape Ann, which operate under long term time charters. The Company intends to acquire newbuilding FSRUs on long-term charters, rather than FSRUs based on retrofitted, first-generation LNG carriers. The PGN FSRU Lampung is located offshore in the Lampung province at the southeast coast of Sumatra, Indonesia.

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