Ardmore Shipping (NYSE: ASC) and Star Bulk Carriers (NASDAQ:SBLK) are both small-cap transportation companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, valuation, profitability, dividends and risk.

Profitability

This table compares Ardmore Shipping and Star Bulk Carriers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ardmore Shipping -6.45% -3.08% -1.41%
Star Bulk Carriers -23.09% -4.04% -2.05%

Volatility and Risk

Ardmore Shipping has a beta of 1.32, meaning that its stock price is 32% more volatile than the S&P 500. Comparatively, Star Bulk Carriers has a beta of 2.81, meaning that its stock price is 181% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings for Ardmore Shipping and Star Bulk Carriers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ardmore Shipping 0 1 3 0 2.75
Star Bulk Carriers 0 1 6 0 2.86

Ardmore Shipping currently has a consensus price target of $10.13, suggesting a potential upside of 27.36%. Star Bulk Carriers has a consensus price target of $13.20, suggesting a potential upside of 21.55%. Given Ardmore Shipping’s higher possible upside, equities research analysts plainly believe Ardmore Shipping is more favorable than Star Bulk Carriers.

Insider & Institutional Ownership

77.3% of Ardmore Shipping shares are owned by institutional investors. Comparatively, 70.4% of Star Bulk Carriers shares are owned 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.

Earnings & Valuation

This table compares Ardmore Shipping and Star Bulk Carriers’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ardmore Shipping $164.40 million 1.62 $3.74 million ($0.37) -21.49
Star Bulk Carriers $222.11 million 3.14 -$154.22 million ($1.12) -9.70

Ardmore Shipping has higher earnings, but lower revenue than Star Bulk Carriers. Ardmore Shipping is trading at a lower price-to-earnings ratio than Star Bulk Carriers, indicating that it is currently the more affordable of the two stocks.

Summary

Ardmore Shipping beats Star Bulk Carriers on 7 of the 12 factors compared between the two stocks.

About Ardmore Shipping

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.

About Star Bulk Carriers

Star Bulk Carriers Corp. is an international shipping company. The Company owns and operates a fleet of dry bulk carrier vessels. As of December 31, 2016, the Company’s fleet included 73 vessels consisting primarily of Newcastlemax and Capesize, as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 52,055 and 209,537 deadweight tonnage (dwt). The Company’s vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes across the world. The Company’s fleet, which emphasizes Capesize vessels, primarily transports minerals from the Americas and Australia to East Asia, particularly China, as well as Japan, South Korea, Taiwan, Indonesia and Malaysia. The Company’s Supramax vessels carry minerals, grain products and steel between the Americas, Europe, Africa, Australia and Indonesia, and from these areas to China, Japan, South Korea, Taiwan, the Philippines and Malaysia.

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