Critical Analysis: Genco Shipping & Trading (GNK) vs. Safe Bulkers (SB)

Genco Shipping & Trading (NYSE: GNK) and Safe Bulkers (NYSE:SB) are both small-cap transportation companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, institutional ownership, valuation, dividends, earnings and profitability.

Risk and Volatility

Genco Shipping & Trading has a beta of 0.04, suggesting that its stock price is 96% less volatile than the S&P 500. Comparatively, Safe Bulkers has a beta of 2.01, suggesting that its stock price is 101% more volatile than the S&P 500.

Insider and Institutional Ownership

86.1% of Genco Shipping & Trading shares are owned by institutional investors. Comparatively, 20.4% of Safe Bulkers shares are owned by institutional investors. 1.2% of Genco Shipping & Trading shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Genco Shipping & Trading and Safe Bulkers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genco Shipping & Trading 0 1 5 0 2.83
Safe Bulkers 1 3 1 0 2.00

Genco Shipping & Trading presently has a consensus target price of $17.75, suggesting a potential upside of 3.26%. Safe Bulkers has a consensus target price of $3.50, suggesting a potential downside of 7.16%. Given Genco Shipping & Trading’s stronger consensus rating and higher possible upside, equities analysts clearly believe Genco Shipping & Trading is more favorable than Safe Bulkers.

Profitability

This table compares Genco Shipping & Trading and Safe Bulkers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Genco Shipping & Trading -39.84% -2.26% -1.45%
Safe Bulkers 8.77% 19.41% 8.92%

Valuation and Earnings

This table compares Genco Shipping & Trading and Safe Bulkers’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genco Shipping & Trading $209.70 million 2.83 -$58.72 million ($1.29) -13.33
Safe Bulkers $148.03 million 2.59 -$84.67 million ($0.16) -23.56

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

Summary

Genco Shipping & Trading beats Safe Bulkers on 9 of the 14 factors compared between the two stocks.

Genco Shipping & Trading Company Profile

Genco Shipping & Trading Limited, together with its subsidiaries, engages in the ocean transportation of dry bulk cargoes worldwide. The company, through the ownership and operation of dry bulk carrier vessels, transports iron ores, coal, grains, steel products, and other dry-bulk cargoes. The company charters its vessels primarily to trading houses, such as commodities traders; producers; and government-owned entities. Its fleet consists of 60 drybulk carriers, including 13 Capesize, 6 Panamax, 4 Ultramax, 21 Supramax, 1 Handymax, and 15 Handysize drybulk carriers with an aggregate carrying capacity of approximately 4,688,000 deadweight tons. Genco Shipping & Trading Limited was founded in 2004 and is based in New York, New York.

Safe Bulkers Company Profile

Safe Bulkers, Inc. provides marine drybulk transportation services worldwide. It is involved in the acquisition, ownership, and operation of drybulk vessels for transporting bulk cargoes primarily coal, grain, and iron ore. As of February 9, 2018, the company had a fleet of 39 drybulk vessels with an aggregate carrying capacity of 3,513,800 deadweight tons. Its fleet consisted of 14 Panamax class vessels, 9 Kamsarmax class vessels, 13 Post-Panamax class vessels, and 3 Capesize class vessels. Safe Bulkers, Inc. was founded in 2007 and is based in Monaco.

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