DryShips (DRYS) and Scorpio Bulkers (SALT) Head to Head Comparison

DryShips (NASDAQ: DRYS) and Scorpio Bulkers (NYSE:SALT) are both small-cap industrials companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Dividends

DryShips pays an annual dividend of $0.10 per share and has a dividend yield of 2.8%. Scorpio Bulkers pays an annual dividend of $0.02 per share and has a dividend yield of 0.2%. DryShips pays out 0.0% of its earnings in the form of a dividend. Scorpio Bulkers pays out -1.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Risk & Volatility

DryShips has a beta of 2.19, meaning that its share price is 119% more volatile than the S&P 500. Comparatively, Scorpio Bulkers has a beta of 3.56, meaning that its share price is 256% more volatile than the S&P 500.

Valuation and Earnings

This table compares DryShips and Scorpio Bulkers’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DryShips $51.93 million 7.27 -$198.68 million ($48,593.32) 0.00
Scorpio Bulkers $78.40 million 7.80 -$124.83 million ($1.10) -7.36

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

Profitability

This table compares DryShips and Scorpio Bulkers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DryShips -177.74% -33.32% -21.74%
Scorpio Bulkers -57.43% -6.51% -3.97%

Insider and Institutional Ownership

2.2% of DryShips shares are held by institutional investors. Comparatively, 40.3% of Scorpio Bulkers shares are held by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and target prices for DryShips and Scorpio Bulkers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DryShips 0 0 0 0 N/A
Scorpio Bulkers 0 2 3 0 2.60

Scorpio Bulkers has a consensus price target of $10.70, suggesting a potential upside of 32.10%. Given Scorpio Bulkers’ higher possible upside, analysts clearly believe Scorpio Bulkers is more favorable than DryShips.

Summary

Scorpio Bulkers beats DryShips on 12 of the 14 factors compared between the two stocks.

DryShips Company Profile

DryShips, Inc. is a holding company. The Company owns drybulk carriers and offshore support vessels. The Company operates through two segments: the drybulk carrier and the offshore support. Under its drybulk segment, the Company operates as a provider of drybulk commodities transportation services for the steel, electric utility, construction and agri-food industries. Under its offshore support segment, the Company operates as a provider of offshore support services to the global offshore energy industry. The Offshore support segment operates a diversified fleet of offshore support vessels. It owns a fleet of approximately 20 Panamax drybulk carriers, which have a combined deadweight tonnage (dwt) of approximately 1.5 million dwt and an average age of approximately 10 years, and six offshore supply vessels, comprising over two platform supply and four oil spill recovery vessels, and have an average age of approximately 3.1 years.

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.

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