Financial Comparison: Teekay (NYSE:TK) & Ship Finance International (NYSE:SFL)

Teekay (NYSE:TK) and Ship Finance International (NYSE:SFL) are both small-cap transportation companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Profitability

This table compares Teekay and Ship Finance International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teekay -7.96% -1.67% -0.57%
Ship Finance International 18.64% 9.35% 3.07%

Risk & Volatility

Teekay has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500. Comparatively, Ship Finance International has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Teekay and Ship Finance International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teekay 0 2 1 0 2.33
Ship Finance International 0 2 3 0 2.60

Teekay presently has a consensus target price of $6.67, suggesting a potential upside of 51.86%. Ship Finance International has a consensus target price of $12.50, suggesting a potential downside of 3.10%. Given Teekay’s higher probable upside, equities research analysts plainly believe Teekay is more favorable than Ship Finance International.

Dividends

Teekay pays an annual dividend of $0.17 per share and has a dividend yield of 3.9%. Ship Finance International pays an annual dividend of $1.40 per share and has a dividend yield of 10.9%. Teekay pays out -32.1% of its earnings in the form of a dividend. Ship Finance International pays out 135.9% 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 7 consecutive years. Ship Finance International is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Teekay and Ship Finance International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Teekay $1.71 billion 0.26 -$79.24 million ($0.53) -8.28
Ship Finance International $418.71 million 3.68 $73.62 million $1.03 12.52

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

Institutional and Insider Ownership

20.9% of Teekay shares are owned by institutional investors. Comparatively, 28.4% of Ship Finance International shares are owned by institutional investors. 2.4% of Teekay shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Ship Finance International beats Teekay on 11 of the 16 factors compared between the two stocks.

Teekay Company Profile

Teekay Corporation provides crude oil and gas marine transportation; offshore oil production; and storage and offloading services in Bermuda and internationally. It operates shuttle tankers; floating production, storage, and offloading units; floating storage and offloading units; HiLoad dynamic positioning units; long-distance towing and offshore installation vessels; and conventional tankers. As of December 31, 2018, its fleet consisted of 155 vessels. The company serves energy and utility companies, oil traders, large oil and LNG consumers, petroleum product producers, government agencies, and various other entities that depend upon marine transportation. Teekay Corporation was founded in 1973 and is based in Hamilton, Bermuda.

Ship Finance International Company Profile

Ship Finance International Ltd. engages in the ownership and operation of vessels and offshore related assets. It also involves in the charter, purchase, and sale of assets. Its assets include oil tankers, dry bulk carriers, container vessels, car carriers, jack-up drilling rig, ultra-deepwater drilling units, offshore supply vessels, and chemical tankers. The company was founded on October 10, 2003 and is headquartered in Hamilton, Bermuda.

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