Teekay Tankers (TNK) & Carnival (CUK) Financial Contrast

Teekay Tankers (NYSE:TNK) and Carnival (NYSE:CUK) are both transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.

Dividends

Teekay Tankers pays an annual dividend of $0.06 per share and has a dividend yield of 5.7%. Carnival pays an annual dividend of $2.00 per share and has a dividend yield of 3.5%. Teekay Tankers pays out -54.5% of its earnings in the form of a dividend. Carnival pays out 52.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Carnival has raised its dividend for 2 consecutive years. Teekay Tankers is clearly the better dividend stock, given its higher yield and lower payout ratio.

Institutional and Insider Ownership

25.7% of Teekay Tankers shares are held by institutional investors. Comparatively, 4.1% of Carnival shares are held by institutional investors. 0.0% of Carnival shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Teekay Tankers and Carnival’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teekay Tankers -13.20% -7.43% -3.43%
Carnival 17.15% 12.30% 7.20%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Teekay Tankers and Carnival, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teekay Tankers 1 3 3 0 2.29
Carnival 0 0 0 0 N/A

Teekay Tankers currently has a consensus price target of $1.52, indicating a potential upside of 44.76%. Given Teekay Tankers’ higher probable upside, equities research analysts clearly believe Teekay Tankers is more favorable than Carnival.

Risk and Volatility

Teekay Tankers has a beta of 1.87, indicating that its stock price is 87% more volatile than the S&P 500. Comparatively, Carnival has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Valuation and Earnings

This table compares Teekay Tankers and Carnival’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Teekay Tankers $431.18 million 0.65 -$58.02 million ($0.11) -9.55
Carnival $17.51 billion 0.68 $2.61 billion $3.82 15.14

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

Summary

Carnival beats Teekay Tankers on 10 of the 16 factors compared between the two stocks.

Teekay Tankers Company Profile

Teekay Tankers Ltd. provides marine transportation services to oil industries in Bermuda and internationally. The company operates through two segments, Conventional Tanker and Ship-To-Ship Transfer. It is involved in the marine transportation of crude oil and refined petroleum products through the operation of its oil and product tankers. The company also provides ship-to-ship transfer services, including lightering and lightering support, consultancy, and LNG terminal management services. As of December 31, 2017, it operated a fleet of 52 owned conventional tankers, 4 conventional tankers related to capital leases, 1 in-chartered vessel, and 1 jointly-owned very large crude carrier; and 6 ship-to-ship support vessels. The company's vessels operated under fixed-rate time charter contracts with its customers. Teekay Tankers Ltd. was founded in 2007 and is based in Hamilton, Bermuda.

Carnival Company Profile

Carnival plc operates as a leisure travel and cruise company. It offers cruises under the Carnival Cruise Line, Princess Cruises, Holland America Line, and Seabourn brands in North America; and Costa, AIDA, P&O Cruises (UK), Cunard, and P&O Cruises (Australia) brands in Europe, Australia, and Asia. The company operates approximately 100 cruise ships. It also owns Holland America Princess Alaska Tours, a tour company in Alaska and the Canadian Yukon, which owns and operates hotels, lodges, glass-domed railcars, and motor coaches. In addition, the company is involved in the leasing of cruise ships. It sells its cruises primarily through travel agents and tour operators. The company was founded in 1850 and is based in Southampton, the United Kingdom. Carnival plc is a subsidiary of Carnival Corporation & Plc.

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