Hoegh LNG Partners (NYSE: HMLP) and Dorian LPG (NYSE:LPG) are both small-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Volatility & Risk

Hoegh LNG Partners has a beta of 0.93, indicating that its stock price is 7% less volatile than the S&P 500. Comparatively, Dorian LPG has a beta of 1.2, indicating that its stock price is 20% more volatile than the S&P 500.

Valuation & Earnings

This table compares Hoegh LNG Partners and Dorian LPG’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hoegh LNG Partners $91.11 million 3.78 $41.37 million $1.57 11.11
Dorian LPG $167.45 million 2.32 -$1.44 million ($0.21) -33.52

Hoegh LNG Partners has higher earnings, but lower revenue than Dorian LPG. Dorian LPG is trading at a lower price-to-earnings ratio than Hoegh LNG Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Hoegh LNG Partners and Dorian LPG, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hoegh LNG Partners 0 0 5 0 3.00
Dorian LPG 0 1 1 0 2.50

Hoegh LNG Partners currently has a consensus price target of $21.63, indicating a potential upside of 23.93%. Dorian LPG has a consensus price target of $10.00, indicating a potential upside of 42.05%. Given Dorian LPG’s higher possible upside, analysts clearly believe Dorian LPG is more favorable than Hoegh LNG Partners.

Dividends

Hoegh LNG Partners pays an annual dividend of $1.72 per share and has a dividend yield of 9.9%. Dorian LPG does not pay a dividend. Hoegh LNG Partners pays out 109.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Institutional & Insider Ownership

64.1% of Hoegh LNG Partners shares are held by institutional investors. Comparatively, 47.7% of Dorian LPG shares are held by institutional investors. 26.5% of Dorian LPG shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Hoegh LNG Partners and Dorian LPG’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hoegh LNG Partners 38.90% 7.77% 3.30%
Dorian LPG -7.30% -4.06% -2.28%

Summary

Hoegh LNG Partners beats Dorian LPG on 10 of the 15 factors compared between the two stocks.

Hoegh LNG Partners Company Profile

Hoegh LNG Partners LP owns, operates and acquires floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers and other LNG infrastructure assets under long-term charters. The Company’s segments include Majority held FSRUs, Joint venture FSRUs and other. The Majority held FSRUs segment includes the direct financing lease related to the PT Perusahaan Gas Negara (Persero) Tbk (PGN) FSRU Lampung and the operating lease related to the Hoegh Gallant. The Joint venture FSRUs segment includes approximately two FSRUs, including the GDF Suez LNG Supply S.A. (GDF Suez) Neptune and the GDF Suez Cape Ann, which operate under long term time charters. The Company intends to acquire newbuilding FSRUs on long-term charters, rather than FSRUs based on retrofitted, first-generation LNG carriers. The PGN FSRU Lampung is located offshore in the Lampung province at the southeast coast of Sumatra, Indonesia.

Dorian LPG Company Profile

Dorian LPG Ltd. is a holding company. The Company, through its subsidiaries, is focused on owning and operating very large gas carrier (VLGCs) in the liquefied petroleum gas (LPG) shipping industry. The Company is engaged in the transportation of LPG across the world through its ownership and operation of LPG tankers. As of March 31, 2016, the Company owned and operated a fleet of 22 VLGCs, including 19 84,000 cubic meter (cbm) ECO-design VLGCs (ECO VLGCs) and three 82,000 cbm VLGCs. The VLGCs in its fleet had an aggregate carrying capacity of approximately 1.8 million cbm at May 26, 2016. It provides in-house commercial and technical management services for all of its vessels. As of May 26, 2016, its VLGCs included Captain Nicholas ML; Captain John NP; Comet; Corsair; Corvette; Cougar; Concorde; Cobra; Continental; Commodore; Constellation; Cheyenne; Cratis; Chaparral; Commander, and Challenger. The Company’s customers include global energy companies, commodity traders and importers.

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