Comparing Teekay Tankers (TNK) and SemGroup (SEMG)

Teekay Tankers (NYSE: TNK) and SemGroup (NYSE:SEMG) are both transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Profitability

This table compares Teekay Tankers and SemGroup’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teekay Tankers -11.43% -0.99% -0.49%
SemGroup -0.41% 5.96% 2.40%

Dividends

Teekay Tankers pays an annual dividend of $0.12 per share and has a dividend yield of 10.0%. SemGroup pays an annual dividend of $1.80 per share and has a dividend yield of 6.7%. Teekay Tankers pays out -42.9% of its earnings in the form of a dividend. SemGroup pays out -2,250.0% 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.

Analyst Ratings

This is a summary of current ratings and price targets for Teekay Tankers and SemGroup, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teekay Tankers 1 2 1 0 2.00
SemGroup 0 4 3 0 2.43

Teekay Tankers currently has a consensus target price of $1.87, indicating a potential upside of 55.56%. SemGroup has a consensus target price of $30.60, indicating a potential upside of 13.04%. Given Teekay Tankers’ higher probable upside, equities analysts plainly believe Teekay Tankers is more favorable than SemGroup.

Earnings and Valuation

This table compares Teekay Tankers and SemGroup’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Teekay Tankers $300.30 million 0.72 $62.85 million ($0.28) -4.29
SemGroup $1.33 billion 1.59 $2.09 million ($0.08) -337.50

Teekay Tankers has higher earnings, but lower revenue than SemGroup. SemGroup is trading at a lower price-to-earnings ratio than Teekay Tankers, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Teekay Tankers has a beta of 2.19, indicating that its share price is 119% more volatile than the S&P 500. Comparatively, SemGroup has a beta of 1.87, indicating that its share price is 87% more volatile than the S&P 500.

Insider & Institutional Ownership

28.6% of Teekay Tankers shares are held by institutional investors. 0.8% of SemGroup shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

SemGroup beats Teekay Tankers on 10 of the 16 factors compared between the two stocks.

About Teekay Tankers

Teekay Tankers Ltd. is an international provider of marine transportation to the oil industries. The Company’s business is to own crude oil and product tankers. The Company has two segments: conventional tanker and ship-to-ship transfer. Its conventional tanker segment consists of the operation of all of its tankers, including those employed on full service lightering contracts. Its ship-to-ship transfer segment consists of its lightering support services, including those provided to the Company’s conventional tanker segment as part of full service lightering operations and other related services. Its operations are managed by Teekay Tankers Management Services Ltd., which provides the Company with commercial, technical, administrative and strategic services. Its fleet consists of approximately 60 conventional vessels (including over 10 in-chartered vessels and an approximately 50%-owned very large crude carrier (VLCC)) and approximately six ship-to-ship (STS) support vessels.

About SemGroup

SemGroup Corporation is a provider of gathering, transportation, storage, distribution, marketing and other midstream services to producers, refiners of petroleum products and other market participants located in the Midwest and Rocky Mountain regions of the United States and Canada. The Company’s segments include Crude Transportation, which operates crude oil pipelines and truck transportation businesses in the United States; Crude Facilities, which operates crude oil storage and terminal businesses in the United States; Crude Supply and Logistics, which operates a crude oil marketing business; SemGas, which provides natural gas gathering and processing services; SemCAMS, which operates natural gas processing and gathering facilities in Alberta, Canada; SemLogistics, which owns petroleum products storage facility in the United Kingdom, and SemMexico, which provides liquid asphalt cement products and product application services to the Mexican market, and Corporate and Other.

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