Scorpio Bulkers (NYSE: SALT) and Global Ship Lease (NYSE:GSL) are both small-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.
Institutional and Insider Ownership
40.3% of Scorpio Bulkers shares are owned by institutional investors. Comparatively, 5.4% of Global Ship Lease shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Scorpio Bulkers and Global Ship Lease’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Global Ship Lease||-18.63%||3.08%||1.36%|
This is a breakdown of recent ratings and target prices for Scorpio Bulkers and Global Ship Lease, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Global Ship Lease||0||0||0||0||N/A|
Scorpio Bulkers presently has a consensus target price of $10.20, indicating a potential upside of 29.94%. Given Scorpio Bulkers’ higher possible upside, equities research analysts plainly believe Scorpio Bulkers is more favorable than Global Ship Lease.
Valuation and Earnings
This table compares Scorpio Bulkers and Global Ship Lease’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Scorpio Bulkers||$78.40 million||7.56||-$124.83 million||($1.10)||-7.14|
|Global Ship Lease||$166.52 million||0.40||-$65.09 million||($0.68)||-1.78|
Global Ship Lease has higher revenue and earnings than Scorpio Bulkers. Scorpio Bulkers is trading at a lower price-to-earnings ratio than Global Ship Lease, indicating that it is currently the more affordable of the two stocks.
Scorpio Bulkers pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Global Ship Lease does not pay a dividend. Scorpio Bulkers pays out -1.8% of its earnings in the form of a dividend.
Risk & Volatility
Scorpio Bulkers has a beta of 3.56, suggesting that its share price is 256% more volatile than the S&P 500. Comparatively, Global Ship Lease has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.
Scorpio Bulkers Company Profile
Scorpio Bulkers Inc. is a shipping company. The Company owns and operates newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 deadweight tons (dwt). The Company operates through two segments: Kamsarmax and Ultramax. Its Kamsarmax segment includes vessels ranging from approximately 77,500 DWT to 98,700 DWT. Its Ultramax segment includes vessels ranging from approximately 60,200 DWT to 64,000 DWT. All of its owned vessels have carrying capacities of greater than 60,000 dwt. Its vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes, and are employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of December 31, 2016, its operating fleet of 48 vessels consisted of 47 drybulk vessels and one chartered-in drybulk vessel. It also has a contract for the construction of one newbuilding drybulk vessel.
Global Ship Lease Company Profile
Global Ship Lease, Inc. is a holding company and containership charter owner. The Company’s activity consists of the ownership and chartering out of containerships. It owns a fleet of containerships with a range of sizes. Its fleet comprises over 20 containerships, with a combined capacity of over 82,310 twenty-foot equivalent unit (TEU) and a weighted average age of over 11.0 years, and a non-weighted average age of over 11.3 years. Its vessels include CMA CGM Matisse, CMA CGM Utrillo, Delmas Keta, Julie Delmas, Kumasi, Marie Delmas, CMA CGM La Tour, CMA CGM Manet, CMA CGM Alcazar, CMA CGM Chateau d’If, CMA CGM Thalassa, CMA CGM Jamaica, CMA CGM Sambhar and CMA CGM America. Approximately 10 vessels are owned by companies incorporated in Cyprus; over four by companies incorporated in Hong Kong, and approximately one is held by another Marshall Islands company. Its subsidiary, Global Ship Lease Services Limited, provides administrative services.
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