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

Profitability

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

Net Margins Return on Equity Return on Assets
Safe Bulkers -2.01% -2.10% -1.01%
Ardmore Shipping Corporation -6.45% -3.08% -1.41%

Risk & Volatility

Safe Bulkers has a beta of 2.4, meaning that its stock price is 140% more volatile than the S&P 500. Comparatively, Ardmore Shipping Corporation has a beta of 1.35, meaning that its stock price is 35% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings for Safe Bulkers and Ardmore Shipping Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Safe Bulkers 1 3 3 0 2.29
Ardmore Shipping Corporation 0 1 3 0 2.75

Safe Bulkers presently has a consensus target price of $3.00, indicating a potential downside of 13.29%. Ardmore Shipping Corporation has a consensus target price of $10.13, indicating a potential upside of 21.99%. Given Ardmore Shipping Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Ardmore Shipping Corporation is more favorable than Safe Bulkers.

Valuation and Earnings

This table compares Safe Bulkers and Ardmore Shipping Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Safe Bulkers $109.77 million 3.20 -$55.96 million ($0.19) -18.21
Ardmore Shipping Corporation $164.40 million 1.70 $3.74 million ($0.37) -22.43

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

Institutional & Insider Ownership

19.0% of Safe Bulkers shares are held by institutional investors. Comparatively, 77.1% of Ardmore Shipping Corporation shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Safe Bulkers beats Ardmore Shipping Corporation on 6 of the 11 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.

Ardmore Shipping Corporation Company Profile

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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