Contrasting Danaos Corporation (NYSE:DAC) and International Seaways (INSW)

Danaos Corporation (NYSE: DAC) and International Seaways (NYSE:INSW) are both small-cap transportation companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, valuation, analyst recommendations, risk, earnings, dividends and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Danaos Corporation and International Seaways, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danaos Corporation 0 2 0 0 2.00
International Seaways 0 0 1 0 3.00

Danaos Corporation currently has a consensus target price of $3.00, suggesting a potential upside of 100.00%. International Seaways has a consensus target price of $30.00, suggesting a potential upside of 51.21%. Given Danaos Corporation’s higher probable upside, analysts plainly believe Danaos Corporation is more favorable than International Seaways.

Valuation and Earnings

This table compares Danaos Corporation and International Seaways’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Danaos Corporation $447.83 million 0.37 $281.14 million ($3.80) -0.39
International Seaways $327.29 million 1.77 $85.71 million ($3.50) -5.67

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

Insider and Institutional Ownership

1.9% of Danaos Corporation shares are held by institutional investors. Comparatively, 85.6% of International Seaways shares are held by institutional investors. 0.5% of International Seaways shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Danaos Corporation and International Seaways’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danaos Corporation -92.96% 16.72% 3.09%
International Seaways -31.22% 0.91% 0.64%

Summary

International Seaways beats Danaos Corporation on 8 of the 13 factors compared between the two stocks.

Danaos Corporation Company Profile

Danaos Corporation is a holding company and an international owner of containerships, chartering its vessels to a range of liner companies. The Company’s principal business is the acquisition and operation of vessels. The Company conducts its operations through the vessel owning companies, whose principal activity is the ownership and operation of containerships that are under the management of a related party of the company. The Company’s manager is Danaos Shipping Company Limited (Danaos Shipping). The Company has a fleet of over 50 containerships aggregating approximately 329,590 twenty-foot equivalent units (TEUs). Its containership fleet includes approximately 53 containerships deployed on time charters and approximately two containerships deployed on bareboat charter. Gemini Shipholdings Corporation (Gemini), a company beneficially owned by the Company, owns approximately four additional containerships of over 24,000 TEU aggregate capacity.

International Seaways Company Profile

International Seaways, Inc. and its subsidiaries own and operate a fleet of oceangoing vessels. The Company’s oceangoing vessels engage in the transportation of crude oil and petroleum products in the International Flag trades. The Company’s segments are International Crude Tankers and International Product Carriers. Its 55-vessel fleet consists of Ultra Large Crude Carrier (ULCC), Very Large Crude Carrier (VLCC), Aframax and Panamax crude tankers, as well as long range 1 (LR1), LR2 and medium range (MR) product carriers. Its International Crude Tankers segment is made up of a ULCC and a fleet of VLCCs, Aframaxes, and Panamaxes. Its International Product Carriers segment consists of a fleet of MRs, LR1s and an LR2 engaged in the transportation of crude and refined petroleum products. Through joint venture partnerships (the JVs), it has ownership interests in approximately four liquefied natural gas carriers and approximately two floating storage and offloading service vessels.

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