Analyzing Ship Finance International (SFL) & Phillips 66 Partners (PSXP)

Ship Finance International (NYSE: SFL) and Phillips 66 Partners (NYSE:PSXP) are both energy companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, analyst recommendations, earnings, valuation, dividends and institutional ownership.

Dividends

Ship Finance International pays an annual dividend of $1.40 per share and has a dividend yield of 9.3%. Phillips 66 Partners pays an annual dividend of $2.71 per share and has a dividend yield of 5.5%. Ship Finance International pays out 141.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phillips 66 Partners pays out 106.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ship Finance International has increased its dividend for 4 consecutive years and Phillips 66 Partners has increased its dividend for 6 consecutive years.

Insider and Institutional Ownership

31.8% of Ship Finance International shares are held by institutional investors. Comparatively, 37.3% of Phillips 66 Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares Ship Finance International and Phillips 66 Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Ship Finance International 28.66% 11.02% 4.01%
Phillips 66 Partners 44.16% 26.73% 11.05%

Analyst Recommendations

This is a summary of current ratings and target prices for Ship Finance International and Phillips 66 Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Ship Finance International 1 2 1 0 2.00
Phillips 66 Partners 0 5 6 0 2.55

Ship Finance International currently has a consensus target price of $14.75, suggesting a potential downside of 1.99%. Phillips 66 Partners has a consensus target price of $58.20, suggesting a potential upside of 17.65%. Given Phillips 66 Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Phillips 66 Partners is more favorable than Ship Finance International.

Volatility and Risk

Ship Finance International has a beta of 1.37, suggesting that its stock price is 37% more volatile than the S&P 500. Comparatively, Phillips 66 Partners has a beta of 1.4, suggesting that its stock price is 40% more volatile than the S&P 500.

Valuation & Earnings

This table compares Ship Finance International and Phillips 66 Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Ship Finance International $412.95 million 3.70 $146.40 million $0.99 15.20
Phillips 66 Partners $1.17 billion 5.14 $461.00 million $2.55 19.40

Phillips 66 Partners has higher revenue and earnings than Ship Finance International. Ship Finance International is trading at a lower price-to-earnings ratio than Phillips 66 Partners, indicating that it is currently the more affordable of the two stocks.

Summary

Phillips 66 Partners beats Ship Finance International on 15 of the 16 factors compared between the two stocks.

Ship Finance International Company Profile

Ship Finance International Limited is a holding, and international ship owning and chartering company. The Company is engaged in the ownership and operation of vessels and offshore related assets, and also involved in the charter, purchase and sale of assets. Its assets consist of approximately 20 oil tankers, over 20 dry bulk carriers, approximately 20 container vessels, including a newbuilding, two car carriers, two jack-up drilling rigs, two ultra-deepwater drilling units, five offshore supply vessels, two chemical tankers and two newbuilding oil product tankers. Its oil tankers, chemical tankers and oil product tankers are all double-hull vessels. It has over nine asset types, including crude oil tankers, oil product tankers, chemical tankers, container vessels, car carriers, dry bulk carriers, jack-up drilling rigs, ultra-deepwater drilling units and offshore supply vessels. Its assets consist of a fleet of Suezmax tankers, crude carriers and oil/bulk/ore carriers.

Phillips 66 Partners Company Profile

Phillips 66 Partners LP (Phillips 66) owns, operates, develops and acquires fee-based crude oil, refined petroleum product and natural gas liquids (NGL) pipelines, terminals and other transportation and midstream assets. The Company’s assets consist of systems, such as Clifton Ridge Crude System, Eagle Ford Gathering System, Ponca Crude System, Billings Crude System, Borger Crude System, Sweeny to Pasadena Products System, Hartford Connector Products System, Gold Line Products System, Cross-Channel Connector Products System, Ponca Products System, Billings Products System, Bayway Products System, Standish Pipeline, Borger Products System, River Parish NGL System, Medford Spheres, Bayway Rail Rack, Ferndale Rail Rack, Sand Hills/Southern Hills Joint Ventures, Explorer Pipeline Joint Venture, Bakken Joint Ventures, Bayou Bridge Pipeline Joint Venture, STACK Pipeline Joint Venture, and Sweeny Fractionator and Clemens Caverns.

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