Global Ship Lease (NYSE:GSL) versus KNOT Offshore Partners (NYSE:KNOP) Financial Review

KNOT Offshore Partners (NYSE:KNOP) and Global Ship Lease (NYSE:GSL) are both small-cap transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, risk, earnings and dividends.

Earnings and Valuation

This table compares KNOT Offshore Partners and Global Ship Lease”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KNOT Offshore Partners	$318.60 million	N/A	$13.93 million	$1.55	6.72
Global Ship Lease	$711.05 million	1.81	$353.63 million	$11.14	3.23

Global Ship Lease has higher revenue and earnings than KNOT Offshore Partners. Global Ship Lease is trading at a lower price-to-earnings ratio than KNOT Offshore Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares KNOT Offshore Partners and Global Ship Lease’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KNOT Offshore Partners	14.69%	9.00%	2.93%
Global Ship Lease	53.62%	23.98%	14.94%

Volatility & Risk

KNOT Offshore Partners has a beta of -0.14, suggesting that its share price is 114% less volatile than the S&P 500. Comparatively, Global Ship Lease has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for KNOT Offshore Partners and Global Ship Lease, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KNOT Offshore Partners	0	5	0	0	2.00
Global Ship Lease	0	2	2	0	2.50

Global Ship Lease has a consensus target price of $33.50, indicating a potential downside of 6.89%. Given Global Ship Lease’s stronger consensus rating and higher possible upside, analysts clearly believe Global Ship Lease is more favorable than KNOT Offshore Partners.

Institutional and Insider Ownership

26.8% of KNOT Offshore Partners shares are held by institutional investors. Comparatively, 50.1% of Global Ship Lease shares are held by institutional investors. 7.4% of Global Ship Lease shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Dividends

KNOT Offshore Partners pays an annual dividend of $0.10 per share and has a dividend yield of 1.0%. Global Ship Lease pays an annual dividend of $2.50 per share and has a dividend yield of 6.9%. KNOT Offshore Partners pays out 6.5% of its earnings in the form of a dividend. Global Ship Lease pays out 22.4% 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. Global Ship Lease has increased its dividend for 2 consecutive years. Global Ship Lease is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Global Ship Lease beats KNOT Offshore Partners on 14 of the 16 factors compared between the two stocks.

About KNOT Offshore Partners

KNOT Offshore Partners LP acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, and discharge of crude oil under time charters and bareboat charters. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.

About Global Ship Lease

Global Ship Lease, Inc., together with its subsidiaries, engages in owning and chartering of containerships under fixed-rate charters to container shipping companies worldwide. As of March 11, 2024, it owned 68 mid-sized and smaller containerships, ranging from 2,207 to 11,040 twenty-foot equivalent unit (TEU), with an aggregate capacity of 375,406 TEU. The company was founded in 2007 and is based in Athens, Greece.