Frontline (NYSE: FRO) and Delek Logistics Partners, L.P. (NYSE:DKL) are both small-cap transportation companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Frontline and Delek Logistics Partners, L.P.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Frontline 4.74% 4.42% 2.11%
Delek Logistics Partners, L.P. 12.70% -368.38% 15.15%

Risk and Volatility

Frontline has a beta of 2.02, indicating that its share price is 102% more volatile than the S&P 500. Comparatively, Delek Logistics Partners, L.P. has a beta of 1.3, indicating that its share price is 30% more volatile than the S&P 500.

Dividends

Frontline pays an annual dividend of $0.60 per share and has a dividend yield of 9.7%. Delek Logistics Partners, L.P. pays an annual dividend of $2.82 per share and has a dividend yield of 9.5%. Frontline pays out 300.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Delek Logistics Partners, L.P. pays out 148.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Delek Logistics Partners, L.P. has raised its dividend for 3 consecutive years.

Insider and Institutional Ownership

12.1% of Frontline shares are held by institutional investors. Comparatively, 28.8% of Delek Logistics Partners, L.P. shares are held by institutional investors. 48.1% of Frontline shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Frontline and Delek Logistics Partners, L.P.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Frontline $660.75 million 1.59 $264.01 million $0.20 30.90
Delek Logistics Partners, L.P. $488.39 million 1.49 $100.26 million $1.90 15.68

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Frontline and Delek Logistics Partners, L.P., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontline 1 1 1 0 2.00
Delek Logistics Partners, L.P. 0 2 1 0 2.33

Frontline presently has a consensus price target of $6.00, indicating a potential downside of 2.91%. Delek Logistics Partners, L.P. has a consensus price target of $33.50, indicating a potential upside of 12.42%. Given Delek Logistics Partners, L.P.’s stronger consensus rating and higher possible upside, analysts plainly believe Delek Logistics Partners, L.P. is more favorable than Frontline.

Frontline Company Profile

Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).

Delek Logistics Partners, L.P. Company Profile

Delek Logistics Partners, LP owns and operates logistics and marketing assets for crude oil, and intermediate and refined products. The Company’s business primarily consists of certain crude oil, intermediate and refined products pipelines and transportation, storage, wholesale marketing, terminaling and offloading assets, which were previously owned, operated or held by Delek US Holdings, Inc. (Delek), and assets acquired from unrelated third parties. The Company operates through two segments: Pipelines and Transportation segment, and Wholesale Marketing and Terminalling segment. The Company engaged in the gathering, transporting and storing crude oil; storing intermediate products and feed stocks, and marketing, distributing, transporting, offloading and storing refined products. The Company also provides crude oil, intermediate and refined products transportation services for terminaling, and marketing services to third parties primarily in Texas, Tennessee and Arkansas.

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