KNOT Offshore Partners (NYSE: KNOP) and DHT Holdings (NYSE:DHT) are both small-cap transportation companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitabiliy, valuation and risk.

Earnings and Valuation

This table compares KNOT Offshore Partners and DHT Holdings’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
KNOT Offshore Partners $175.49 million 3.95 $133.46 million $2.33 10.02
DHT Holdings $340.56 million 1.15 $182.02 million ($0.14) -29.64

DHT Holdings has higher revenue and earnings than KNOT Offshore Partners. DHT Holdings is trading at a lower price-to-earnings ratio than KNOT Offshore Partners, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

KNOT Offshore Partners has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, DHT Holdings has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for KNOT Offshore Partners and DHT Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KNOT Offshore Partners 0 2 0 0 2.00
DHT Holdings 0 3 3 0 2.50

KNOT Offshore Partners currently has a consensus price target of $20.00, suggesting a potential downside of 14.35%. DHT Holdings has a consensus price target of $5.94, suggesting a potential upside of 43.07%. Given DHT Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe DHT Holdings is more favorable than KNOT Offshore Partners.

Profitability

This table compares KNOT Offshore Partners and DHT Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
KNOT Offshore Partners 35.03% 10.34% 4.39%
DHT Holdings -2.47% 10.84% 5.47%

Insider & Institutional Ownership

49.3% of KNOT Offshore Partners shares are held by institutional investors. Comparatively, 53.6% of DHT Holdings shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 8.9%. DHT Holdings pays an annual dividend of $0.32 per share and has a dividend yield of 7.7%. KNOT Offshore Partners pays out 89.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DHT Holdings pays out -228.6% of its earnings in the form of a dividend. KNOT Offshore Partners has raised its dividend for 3 consecutive years and DHT Holdings has raised its dividend for 2 consecutive years. KNOT Offshore Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

DHT Holdings beats KNOT Offshore Partners on 10 of the 15 factors compared between the two stocks.

About KNOT Offshore Partners

KNOT Offshore Partners LP (KNOT Offshore Partners or the Partnership), owns, operates and acquires shuttle tankers under long-term charters. The Partnership’s vessels in its fleet are chartered to Statoil ASA (Statoil), Petrobras Transporte S.A. (Transpetro), Repsol Sinopec Brasil, S.A. (Repsol), Royal Dutch Shell plc, ExxonMobil, and Eni Trading and Shipping S.p.A. (ENI). As of March 17, 2017, the Company had a fleet of 12 shuttle tankers. Its shuttle tankers include Fortaleza Knutsen, Recife Knutsen, Bodil Knutsen and Dan Cisne. KNOT Offshore Partners GP LLC is the general partner of the Partnership. It is engaged in the loading, transportation and storage of the crude oil using the vessels in its fleet. It provides all of these services under time charters and bareboat charters. As of December 31, 2016, eight of its shuttle tankers were chartered under time charters and four of its shuttle tankers were chartered under bareboat charters.

About DHT Holdings

DHT Holdings, Inc. operates a fleet of crude oil tankers. As of March 21, 2017, the Company’s fleet consisted of 21 crude oil tankers in operation. As of March 21, 2017, the Company’s fleet consisted of 19 very large crude carriers (VLCCs), which are tankers ranging in size from 200,000 to 320,000 deadweight tons (dwt), and two Aframax tankers (Aframaxes), which are tankers ranging in size from 80,000 to 120,000 dwt. As of December 31, 2016, the Company’s fleet in operation had a combined carrying capacity of 6,087,095 dwt. As of March 21, 2017, the Company’s VLCCs included DHT Ann, DHT Eagle, DHT Phoenix, DHT Hawk, DHT Condor, DHT Scandinavia, DHT China, DHT Amazon, DHT Redwood, DHT Sundarbans, DHT Taiga, DHT Leopard, DHT Lion, DHT Panther and DHT Puma. As of March 21, 2017, the Company’s Aframaxes are DHT Cathy and DHT Sophie.

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