Reviewing Flex LNG (NYSE:FLNG) and Frontline (NYSE:FRO)

Frontline (NYSE:FRO) and Flex LNG (NYSE:FLNG) are both transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, risk, valuation, dividends, earnings, profitability and institutional ownership.

Dividends

Frontline pays an annual dividend of $1.44 per share and has a dividend yield of 6.2%. Flex LNG pays an annual dividend of $3.00 per share and has a dividend yield of 11.8%. Frontline pays out 146.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Flex LNG pays out 163.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Frontline and Flex LNG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Frontline	12.23%	8.89%	3.44%
Flex LNG	28.06%	14.04%	4.09%

Institutional & Insider Ownership

22.7% of Frontline shares are owned by institutional investors. 48.1% of Frontline shares are owned by insiders. Comparatively, 0.3% of Flex LNG shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Volatility and Risk

Frontline has a beta of 0.06, suggesting that its share price is 94% less volatile than the S&P 500. Comparatively, Flex LNG has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Frontline and Flex LNG, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Frontline	1	2	3	0	2.33
Flex LNG	0	3	0	0	2.00

Frontline presently has a consensus price target of $24.62, suggesting a potential upside of 5.21%. Flex LNG has a consensus price target of $23.00, suggesting a potential downside of 9.17%. Given Frontline’s stronger consensus rating and higher possible upside, equities analysts clearly believe Frontline is more favorable than Flex LNG.

Earnings and Valuation

This table compares Frontline and Flex LNG”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Frontline	$2.16 billion	2.41	$495.58 million	$0.98	23.88
Flex LNG	$356.35 million	3.83	$117.68 million	$1.83	13.84

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

Summary

Frontline beats Flex LNG on 9 of the 16 factors compared between the two stocks.

About Frontline

Frontline plc, a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2022, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Limassol, Cyprus.

About Flex LNG

FLEX LNG Ltd. engages in the seaborne transportation of liquefied natural gas (LPG) through the ownership and operation of LNG carriers. The company was founded by Philip Eystein Fjeld, Trym Tveitnes and Jostein Ueland in September 2006 and is headquartered in Hamilton, Bermuda.