Capital Product Partners L.P. (NASDAQ: CPLP) and Danaos Corporation (NYSE:DAC) are both small-cap transportation companies, but which is the better stock? We will compare the two companies based on the strength of their analyst recommendations, risk, profitability, valuation, dividends, institutional ownership and earnings.

Dividends

Capital Product Partners L.P. pays an annual dividend of $0.32 per share and has a dividend yield of 8.8%. Danaos Corporation does not pay a dividend. Capital Product Partners L.P. pays out 106.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Capital Product Partners L.P. and Danaos Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Capital Product Partners L.P. 18.20% 4.95% 2.80%
Danaos Corporation -92.96% 16.72% 3.09%

Volatility & Risk

Capital Product Partners L.P. has a beta of 1.64, meaning that its share price is 64% more volatile than the S&P 500. Comparatively, Danaos Corporation has a beta of 1.35, meaning that its share price is 35% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Capital Product Partners L.P. and Danaos Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Capital Product Partners L.P. 0 0 4 0 3.00
Danaos Corporation 0 2 0 0 2.00

Capital Product Partners L.P. currently has a consensus target price of $5.00, indicating a potential upside of 37.36%. Danaos Corporation has a consensus target price of $3.00, indicating a potential upside of 114.29%. Given Danaos Corporation’s higher possible upside, analysts clearly believe Danaos Corporation is more favorable than Capital Product Partners L.P..

Insider and Institutional Ownership

17.6% of Capital Product Partners L.P. shares are held by institutional investors. Comparatively, 1.9% of Danaos Corporation shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Capital Product Partners L.P. and Danaos Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Capital Product Partners L.P. $245.00 million 1.84 $160.90 million $0.30 12.13
Danaos Corporation $447.83 million 0.34 $281.14 million ($3.80) -0.37

Danaos Corporation has higher revenue and earnings than Capital Product Partners L.P.. Danaos Corporation is trading at a lower price-to-earnings ratio than Capital Product Partners L.P., indicating that it is currently the more affordable of the two stocks.

Summary

Capital Product Partners L.P. beats Danaos Corporation on 8 of the 14 factors compared between the two stocks.

Capital Product Partners L.P. Company Profile

Capital Product Partners L.P. is an international owner of tanker, container and drybulk vessels. The Company’s fleet consisted of 36 high specification vessels with an average age of approximately 7.4 years, as of December 31, 2016. As of December 31, 2016, its fleet consisted of four Suezmax crude oil tankers, 21 medium range product tankers, 10 post-panamax container carrier vessels and one Capesize bulk carrier. The Company’s vessels are capable of carrying a range of cargoes, including crude oil, refined oil products, such as gasoline, diesel, fuel oil and jet fuel, edible oils and certain chemicals, such as ethanol, as well as dry cargo and containerized goods. Its fleet consists of product tankers, such as Aktoras, Aiolos, Agisilaos, Akeraios and Apostolos; crude tankers, such as Amoureux, Aias, Amore Mio II and Miltiadis M II; drybulk vessels, such as Cape Agamemnon, and container carrier vessels, such as Archimidis, Agamemnon and Hyundai Platinum.

Danaos Corporation Company Profile

Danaos Corporation is a holding company and an international owner of containerships, chartering its vessels to a range of liner companies. The Company’s principal business is the acquisition and operation of vessels. The Company conducts its operations through the vessel owning companies, whose principal activity is the ownership and operation of containerships that are under the management of a related party of the company. The Company’s manager is Danaos Shipping Company Limited (Danaos Shipping). The Company has a fleet of over 50 containerships aggregating approximately 329,590 twenty-foot equivalent units (TEUs). Its containership fleet includes approximately 53 containerships deployed on time charters and approximately two containerships deployed on bareboat charter. Gemini Shipholdings Corporation (Gemini), a company beneficially owned by the Company, owns approximately four additional containerships of over 24,000 TEU aggregate capacity.

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