Critical Review: Hafnia (NYSE:HAFN) and Nordic American Tankers (NYSE:NAT)

Nordic American Tankers (NYSE:NAT) and Hafnia (NYSE:HAFN) are both transportation companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Volatility and Risk

Nordic American Tankers has a beta of -0.43, suggesting that its share price is 143% less volatile than the S&P 500. Comparatively, Hafnia has a beta of 1.04, suggesting that its share price is 4% more volatile than the S&P 500.

Dividends

Nordic American Tankers pays an annual dividend of $0.52 per share and has a dividend yield of 12.8%. Hafnia pays an annual dividend of $0.59 per share and has a dividend yield of 10.3%. Nordic American Tankers pays out 2,600.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hafnia pays out 96.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nordic American Tankers has increased its dividend for 1 consecutive years. Nordic American Tankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional & Insider Ownership

44.3% of Nordic American Tankers shares are owned by institutional investors. 2.9% of Nordic American Tankers shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Nordic American Tankers and Hafnia’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nordic American Tankers	1.12%	0.39%	0.21%
Hafnia	29.50%	13.50%	8.46%

Valuation and Earnings

This table compares Nordic American Tankers and Hafnia”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordic American Tankers	$225.10 million	3.81	$46.64 million	$0.02	202.75
Hafnia	$1.94 billion	N/A	$774.03 million	$0.61	9.41

Hafnia has higher revenue and earnings than Nordic American Tankers. Hafnia is trading at a lower price-to-earnings ratio than Nordic American Tankers, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Nordic American Tankers and Hafnia, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordic American Tankers	0	3	0	0	2.00
Hafnia	0	1	0	1	3.00

Nordic American Tankers presently has a consensus price target of $3.25, suggesting a potential downside of 19.85%. Given Nordic American Tankers’ higher possible upside, equities research analysts plainly believe Nordic American Tankers is more favorable than Hafnia.

Summary

Hafnia beats Nordic American Tankers on 10 of the 16 factors compared between the two stocks.

About Nordic American Tankers

Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 20 Suezmax crude oil tankers. The company was incorporated in 1995 and is headquartered in Hamilton, Bermuda.

About Hafnia

Hafnia Limited owns and operates oil product tankers in Bermuda. It operates through Long Range II, Long Range I, Medium Range (MR), Handy size, and Specialized segments. The company transports clean and dirty, refined oil products, vegetable oil, and easy chemicals to national and international oil companies, and chemical companies, as well as trading and utility companies; and owns and operates 200 vessels. It provides ship owning, ship-management, investment, management, corporate support, and agency office services. In addition, the company provides integrated shipping platform, including technical management, commercial and chartering services, pool management, and large-scale bunker desk services. Hafnia Limited is based in Hamilton, Bermuda.