Safe Bulkers (NYSE: SB) and Euroseas (NASDAQ:ESEA) are both small-cap transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, risk, earnings, valuation, analyst recommendations, dividends and institutional ownership.

Profitability

This table compares Safe Bulkers and Euroseas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Safe Bulkers -26.74% -3.34% -1.61%
Euroseas -77.39% -17.55% -6.51%

Insider and Institutional Ownership

19.0% of Safe Bulkers shares are held by institutional investors. Comparatively, 1.7% of Euroseas shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

Safe Bulkers has a beta of 2.34, indicating that its stock price is 134% more volatile than the S&P 500. Comparatively, Euroseas has a beta of 1.64, indicating that its stock price is 64% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Safe Bulkers and Euroseas, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safe Bulkers 0 4 3 0 2.43
Euroseas 0 0 1 0 3.00

Safe Bulkers currently has a consensus target price of $3.19, suggesting a potential downside of 5.13%. Euroseas has a consensus target price of $3.00, suggesting a potential upside of 74.42%. Given Euroseas’ stronger consensus rating and higher possible upside, analysts plainly believe Euroseas is more favorable than Safe Bulkers.

Valuation and Earnings

This table compares Safe Bulkers and Euroseas’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Safe Bulkers $127.17 million 2.68 $59.75 million ($0.57) -5.89
Euroseas $32.84 million 0.59 $3.25 million ($3.15) -0.55

Safe Bulkers has higher revenue and earnings than Euroseas. Safe Bulkers is trading at a lower price-to-earnings ratio than Euroseas, indicating that it is currently the more affordable of the two stocks.

Summary

Safe Bulkers beats Euroseas on 10 of the 12 factors compared between the two stocks.

Safe Bulkers Company Profile

Safe Bulkers, Inc. is a holding company. The Company’s principal business is the acquisition, ownership and operation of drybulk vessels. The Company’s vessels operate across the world, carrying drybulk cargo for the consumers of marine drybulk transportation services. The Company is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along shipping routes across the world. As of February 17, 2017 the Company’s fleet included 38 vessels, of which 14 are Panamax class vessels, nine are Kamsarmax class vessels, 12 are Post-Panamax class vessels and three are Capesize class vessels, with an aggregate carrying capacity of 3,421,800 deadweight tonnage (dwt). The Company’s fleet of Post-Panamax vessels includes Marina, Xenia, Sophia, Eleni, Martine, Andreas K, Panayiota K, Venus Heritage, Venus History, Venus Horizon and Troodos Sun. Its fleet of Capesize vessels includes Kanaris, Pelopidas and Lake Despina.

Euroseas Company Profile

Euroseas Ltd. is engaged in the shipping business. The Company is an owner and operator of drybulk and container carrier vessels and is a provider of seaborne transportation for drybulk and containerized cargoes. Eurobulk Ltd. manages the Company’s operations. The Company also owns and operates dry bulk carriers that transport major bulks, such as iron ore, coal and grains, and minor bulks, such as bauxite, phosphate and fertilizers. The Company has a fleet of 12 vessels, including Kamsarmax drybulk carrier, Panamax drybulk carriers and Handymax drybulk carrier, Intermediate containerships, Handysize containerships, and Feeder containerships. The Company‚Äôs five drybulk carriers have a total cargo capacity of 351,272 deadweight tons (dwt), and its seven containerships have a cargo capacity of 11,828 twenty-foot equivalent units (teu).

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