Critical Contrast: Frontline (FRO) and General Maritime (GNRT)

Frontline (NYSE: FRO) and General Maritime (NYSE:GNRT) are both small-cap transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, profitability, dividends and risk.

Risk and Volatility

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Frontline has a beta of 1.68, suggesting that its share price is 68% more volatile than the S&P 500. Comparatively, General Maritime has a beta of 1, suggesting that its share price has a similar volatility profile to the S&P 500.

Earnings and Valuation

This table compares Frontline and General Maritime’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Frontline $646.33 million 1.13 -$264.86 million ($0.03) -143.00
General Maritime $298.37 million 1.62 -$168.54 million ($0.25) -23.28

General Maritime has lower revenue, but higher earnings than Frontline. Frontline is trading at a lower price-to-earnings ratio than General Maritime, indicating that it is currently the more affordable of the two stocks.

Dividends

Frontline pays an annual dividend of $0.15 per share and has a dividend yield of 3.5%. General Maritime does not pay a dividend. Frontline pays out -500.0% of its earnings in the form of a dividend. Frontline has increased its dividend for 2 consecutive years.

Profitability

This table compares Frontline and General Maritime’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Frontline -40.98% -0.31% -0.14%
General Maritime -56.54% -1.55% -0.74%

Insider & Institutional Ownership

14.4% of Frontline shares are held by institutional investors. Comparatively, 69.4% of General Maritime shares are held by institutional investors. 48.1% of Frontline shares are held by insiders. Comparatively, 13.7% of General Maritime shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent recommendations for Frontline and General Maritime, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontline 1 1 2 0 2.25
General Maritime 0 2 2 0 2.50

Frontline currently has a consensus price target of $5.67, suggesting a potential upside of 32.09%. General Maritime has a consensus price target of $8.50, suggesting a potential upside of 46.05%. Given General Maritime’s stronger consensus rating and higher probable upside, analysts clearly believe General Maritime is more favorable than Frontline.

Summary

Frontline beats General Maritime on 10 of the 16 factors compared between the two stocks.

About Frontline

Frontline Ltd. is a shipping company. The Company is engaged in the seaborne transportation of crude oil and oil products. Its tankers segment includes crude oil tankers and product tankers. As of December 31, 2016, the Company’s fleet consisted of 28 vessels owned by the Company (seven very large crude carriers (VLCCs), 10 Suezmax tankers and 11 Aframax/LR2 tankers); 13 vessels that are under capital leases (11 VLCCs and two Suezmax tankers); one VLCC that is recorded as an investment in finance lease; four vessels chartered-in for periods of 12 months, including extension options (two VLCCs and two Suezmax tankers); two VLCCs where cost/revenue is split equally with a third party (of which one is chartered-in by it and one by a third party); three medium range product tankers that are chartered-in on short term time charters with a remaining duration of less than two months, and five vessels that are under commercial management (two Suezmax tankers and three Aframax oil tankers).

About General Maritime

Gener8 Maritime, Inc. provides international seaborne crude oil and petroleum products transportation services. As of March 14, 2018, it had a fleet of 30 vessels comprising 21 very large crude carriers, 6 Suezmaxes, 1 Aframax, and 2 Panamax tankers with a total carrying capacity of approximately 7.5 million deadweight tons. The company was formerly known as General Maritime Corporation and changed its name to Gener8 Maritime, Inc. in May 2015. Gener8 Maritime, Inc. was founded in 1997 and is based in New York, New York.

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