Star Bulk Carriers (SBLK) and StealthGas (GASS) Head to Head Review

Star Bulk Carriers (NASDAQ: SBLK) and StealthGas (NASDAQ:GASS) are both small-cap transportation companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Earnings & Valuation

This table compares Star Bulk Carriers and StealthGas’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Star Bulk Carriers $222.11 million 3.43 -$154.22 million ($1.12) -10.62
StealthGas $144.13 million 1.23 -$7.79 million ($0.16) -27.81

StealthGas has lower revenue, but higher earnings than Star Bulk Carriers. StealthGas is trading at a lower price-to-earnings ratio than Star Bulk Carriers, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current ratings and price targets for Star Bulk Carriers and StealthGas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Star Bulk Carriers 0 1 6 0 2.86
StealthGas 0 0 1 0 3.00

Star Bulk Carriers presently has a consensus target price of $13.20, indicating a potential upside of 11.02%. StealthGas has a consensus target price of $7.00, indicating a potential upside of 57.30%. Given StealthGas’ stronger consensus rating and higher probable upside, analysts plainly believe StealthGas is more favorable than Star Bulk Carriers.

Insider and Institutional Ownership

70.4% of Star Bulk Carriers shares are owned by institutional investors. Comparatively, 60.6% of StealthGas shares are owned by institutional investors. 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.

Risk & Volatility

Star Bulk Carriers has a beta of 2.73, indicating that its stock price is 173% more volatile than the S&P 500. Comparatively, StealthGas has a beta of 1.83, indicating that its stock price is 83% more volatile than the S&P 500.

Profitability

This table compares Star Bulk Carriers and StealthGas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Star Bulk Carriers -23.09% -4.04% -2.05%
StealthGas -4.14% 1.06% 0.61%

Summary

StealthGas beats Star Bulk Carriers on 7 of the 13 factors compared between the two stocks.

About Star Bulk Carriers

Star Bulk Carriers Corp. is an international shipping company. The Company owns and operates a fleet of dry bulk carrier vessels. As of December 31, 2016, the Company’s fleet included 73 vessels consisting primarily of Newcastlemax and Capesize, as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 52,055 and 209,537 deadweight tonnage (dwt). The Company’s vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes across the world. The Company’s fleet, which emphasizes Capesize vessels, primarily transports minerals from the Americas and Australia to East Asia, particularly China, as well as Japan, South Korea, Taiwan, Indonesia and Malaysia. The Company’s Supramax vessels carry minerals, grain products and steel between the Americas, Europe, Africa, Australia and Indonesia, and from these areas to China, Japan, South Korea, Taiwan, the Philippines and Malaysia.

About StealthGas

StealthGas Inc. is a provider of international seaborne transportation services to liquefied petroleum gas (LPG) producers and users, as well as crude oil and product carriers to oil producers, refineries and commodities traders. The Company owns a fleet of LPG carriers. Its LPG carriers carry various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene and vinyl chloride monomer, which are all byproducts of the production of crude oil and natural gas. The medium range product carriers in its fleet are capable of carrying refined petroleum products, such as gasoline, diesel, fuel oil and jet fuel, as well as edible oils and chemicals, while its Aframax tanker is used for carrying crude oil. Its fleet consists of approximately 50 LPG carriers, including two chartered-in LPG carriers, two 2008-built product carriers, a 2009-built product carrier and a 2010-built Aframax crude oil tanker.

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