Financial Review: Scorpio Tankers (STNG) vs. The Competition

Scorpio Tankers (NYSE: STNG) is one of 44 publicly-traded companies in the “Deep sea foreign transportation of freight” industry, but how does it compare to its competitors? We will compare Scorpio Tankers to similar companies based on the strength of its dividends, risk, analyst recommendations, earnings, profitability, valuation and institutional ownership.

Valuation and Earnings

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This table compares Scorpio Tankers and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Net Income Price/Earnings Ratio
Scorpio Tankers $512.73 million -$158.24 million -4.00
Scorpio Tankers Competitors $311.95 million -$36.87 million -6.11

Scorpio Tankers has higher revenue, but lower earnings than its competitors. Scorpio Tankers is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

Scorpio Tankers pays an annual dividend of $0.04 per share and has a dividend yield of 2.1%. Scorpio Tankers pays out -8.5% of its earnings in the form of a dividend. As a group, “Deep sea foreign transportation of freight” companies pay a dividend yield of 7.4% and pay out 409.4% of their earnings in the form of a dividend.

Profitability

This table compares Scorpio Tankers and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scorpio Tankers -30.86% -6.73% -2.57%
Scorpio Tankers Competitors -19.92% 2.23% -0.48%

Institutional and Insider Ownership

64.8% of Scorpio Tankers shares are owned by institutional investors. Comparatively, 45.0% of shares of all “Deep sea foreign transportation of freight” companies are owned by institutional investors. 23.8% of shares of all “Deep sea foreign transportation of freight” companies are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Scorpio Tankers has a beta of 1.39, meaning that its stock price is 39% more volatile than the S&P 500. Comparatively, Scorpio Tankers’ competitors have a beta of 1.26, meaning that their average stock price is 26% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Scorpio Tankers and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scorpio Tankers 0 0 7 0 3.00
Scorpio Tankers Competitors 333 878 1001 10 2.31

Scorpio Tankers currently has a consensus target price of $4.96, indicating a potential upside of 164.06%. As a group, “Deep sea foreign transportation of freight” companies have a potential upside of 43.14%. Given Scorpio Tankers’ stronger consensus rating and higher possible upside, analysts plainly believe Scorpio Tankers is more favorable than its competitors.

Summary

Scorpio Tankers beats its competitors on 8 of the 15 factors compared.

Scorpio Tankers Company Profile

Scorpio Tankers Inc. (Scorpio Tankers) is engaged in the seaborne transportation of refined petroleum products in the international shipping markets. The Company operates through four segments: Handymax, MR, LR1/Panamax and LR2. As of March 15, 2017, the Company’s fleet consisted of 78 owned tankers (22 LR2, 14 Handymax and 42 MR) with a weighted average age of approximately 2.3 years, and 19 time or bareboat chartered-in tankers, which it operated (one LR2, one LR1, eight MR and nine Handymax) (collectively referred to as its Operating Fleet). As of March 1, 2017, the Company’s total oil tanker fleet (crude, products and product/chemical tankers) consisted of 4,754 ships with a combined capacity of 525.9 million deadweight tonnage. As of December 31, 2016, the Company also had contracts for the construction of one LR2 tanker and eight MR tankers. Its vessels include STI Brixton, STI Comandante, STI Finchley, STI Hammersmith, STI Larvotto, STI San Antonio and STI Regina.

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