Critical Survey: Euroseas (ESEA) & Ardmore Shipping (ASC)

Euroseas (NASDAQ: ESEA) and Ardmore Shipping (NYSE:ASC) are both small-cap transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, valuation, profitability, earnings, analyst recommendations, institutional ownership and dividends.

Analyst Ratings

This is a breakdown of current recommendations for Euroseas and Ardmore Shipping, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Euroseas 0 0 1 0 3.00
Ardmore Shipping 0 1 4 0 2.80

Euroseas presently has a consensus target price of $3.00, indicating a potential upside of 73.41%. Ardmore Shipping has a consensus target price of $10.70, indicating a potential upside of 45.58%. Given Euroseas’ stronger consensus rating and higher probable upside, analysts plainly believe Euroseas is more favorable than Ardmore Shipping.

Volatility & Risk

Euroseas has a beta of 1.71, indicating that its share price is 71% more volatile than the S&P 500. Comparatively, Ardmore Shipping has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Valuation & Earnings

This table compares Euroseas and Ardmore Shipping’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Euroseas $28.42 million 0.68 -$44.22 million ($3.02) -0.57
Ardmore Shipping $164.40 million 1.50 $3.74 million ($0.37) -19.86

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

Institutional and Insider Ownership

1.7% of Euroseas shares are held by institutional investors. Comparatively, 75.7% of Ardmore Shipping shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Euroseas and Ardmore Shipping’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Euroseas -70.00% -14.29% -4.86%
Ardmore Shipping -6.45% -3.08% -1.41%

Summary

Ardmore Shipping beats Euroseas on 9 of the 12 factors compared between the two stocks.

Euroseas Company Profile

Euroseas Ltd. is engaged in the shipping business. The Company is an owner and operator of drybulk and container carrier vessels and is a provider of seaborne transportation for drybulk and containerized cargoes. Eurobulk Ltd. manages the Company’s operations. The Company also owns and operates dry bulk carriers that transport major bulks, such as iron ore, coal and grains, and minor bulks, such as bauxite, phosphate and fertilizers. The Company has a fleet of 12 vessels, including Kamsarmax drybulk carrier, Panamax drybulk carriers and Handymax drybulk carrier, Intermediate containerships, Handysize containerships, and Feeder containerships. The Company’s five drybulk carriers have a total cargo capacity of 351,272 deadweight tons (dwt), and its seven containerships have a cargo capacity of 11,828 twenty-foot equivalent units (teu).

Ardmore Shipping Company Profile

Ardmore Shipping Corporation provides seaborne transportation of petroleum products and chemicals to national oil companies, oil and chemical traders, and chemical companies, with its fleet of mid-size product and chemical tankers. The Company’s segment relates to the operations of its vessels. The Company’s fleet consists of over 20 double-hulled product and chemical tankers, all of which are in operation. The Company’s vessels include Ardmore Seavaliant, Ardmore Seaventure, Ardmore Seavantage, Ardmore Seavanguard, Ardmore Sealion, Ardmore Seafox, Ardmore Seahawk, Ardmore Endeavour, Ardmore Seafarer, Ardmore Seatrader, Ardmore Seamaster and Ardmore Sealeader. The Company has over 30 subsidiaries, the majority of which represent single ship-owning companies for its fleet. Its subsidiaries include Ardmore Shipping (Bermuda) Limited (ASBL), Ardmore Shipping Services (Ireland) Limited (ASSIL), Ardmore Shipping (Asia) Pte. Limited and Ardmore Shipping (Americas) LLC.

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