Contrasting Kinder Morgan (KMI) & Ship Finance International (SFL)

Ship Finance International (NYSE: SFL) and Kinder Morgan (NYSE:KMI) are both energy companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Dividends

Ship Finance International pays an annual dividend of $1.40 per share and has a dividend yield of 9.4%. Kinder Morgan pays an annual dividend of $0.50 per share and has a dividend yield of 2.9%. Ship Finance International pays out 141.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Kinder Morgan pays out 5,000.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ship Finance International has increased its dividend for 6 consecutive years. Ship Finance International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Ship Finance International and Kinder Morgan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ship Finance International 28.66% 11.02% 4.01%
Kinder Morgan 1.34% 4.38% 1.96%

Insider and Institutional Ownership

31.0% of Ship Finance International shares are held by institutional investors. Comparatively, 60.4% of Kinder Morgan shares are held by institutional investors. 14.0% of Kinder Morgan shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

Ship Finance International has a beta of 1.37, indicating that its stock price is 37% more volatile than the S&P 500. Comparatively, Kinder Morgan has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500.

Valuation & Earnings

This table compares Ship Finance International and Kinder Morgan’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ship Finance International $412.95 million 3.67 $146.40 million $0.99 15.10
Kinder Morgan $13.71 billion 2.80 $183.00 million $0.01 1,739.00

Kinder Morgan has higher revenue and earnings than Ship Finance International. Ship Finance International is trading at a lower price-to-earnings ratio than Kinder Morgan, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Ship Finance International and Kinder Morgan, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ship Finance International 1 2 1 0 2.00
Kinder Morgan 0 10 10 0 2.50

Ship Finance International currently has a consensus price target of $14.75, indicating a potential downside of 1.34%. Kinder Morgan has a consensus price target of $22.50, indicating a potential upside of 29.38%. Given Kinder Morgan’s stronger consensus rating and higher possible upside, analysts plainly believe Kinder Morgan is more favorable than Ship Finance International.

Summary

Ship Finance International beats Kinder Morgan on 9 of the 17 factors compared between the two stocks.

Ship Finance International Company Profile

Ship Finance International Limited is a holding, and international ship owning and chartering company. The Company is engaged in the ownership and operation of vessels and offshore related assets, and also involved in the charter, purchase and sale of assets. Its assets consist of approximately 20 oil tankers, over 20 dry bulk carriers, approximately 20 container vessels, including a newbuilding, two car carriers, two jack-up drilling rigs, two ultra-deepwater drilling units, five offshore supply vessels, two chemical tankers and two newbuilding oil product tankers. Its oil tankers, chemical tankers and oil product tankers are all double-hull vessels. It has over nine asset types, including crude oil tankers, oil product tankers, chemical tankers, container vessels, car carriers, dry bulk carriers, jack-up drilling rigs, ultra-deepwater drilling units and offshore supply vessels. Its assets consist of a fleet of Suezmax tankers, crude carriers and oil/bulk/ore carriers.

Kinder Morgan Company Profile

Kinder Morgan, Inc. is an energy infrastructure company. It operates through five segments. Its Natural Gas Pipelines segment is engaged in the ownership and operation of interstate and intrastate natural gas pipeline and storage systems, and liquefied natural gas facilities, among others. Its CO2 segment is engaged in the production, transportation and marketing of carbon dioxide (CO2) to oil fields and the ownership and operation of a crude oil pipeline system, among others. Its Terminals segment is engaged in the ownership and/or operation of liquids and bulk terminal facilities located throughout the United States and portions of Canada, and Jones Act tankers. Its Products Pipelines segment is engaged in the ownership and operation of refined petroleum products, natural gas liquids and crude oil and condensate pipelines. Its Kinder Morgan Canada segment is engaged in the ownership and operation of the Trans Mountain pipeline system and Jet Fuel aviation turbine fuel pipeline.

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