Danaos Corporation (NYSE: DAC) and Global Ship Lease (NYSE:GSL) are both small-cap transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, risk, dividends, earnings, analyst recommendations, institutional ownership and profitability.

Profitability

This table compares Danaos Corporation and Global Ship Lease’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danaos Corporation -92.96% 16.72% 3.09%
Global Ship Lease -38.68% 1.96% 0.86%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Danaos Corporation and Global Ship Lease, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danaos Corporation 0 2 0 0 2.00
Global Ship Lease 0 0 0 0 N/A

Danaos Corporation presently has a consensus price target of $3.00, suggesting a potential upside of 87.50%. Given Danaos Corporation’s higher probable upside, equities research analysts clearly believe Danaos Corporation is more favorable than Global Ship Lease.

Valuation and Earnings

This table compares Danaos Corporation and Global Ship Lease’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Danaos Corporation $447.83 million 0.39 $281.14 million ($3.80) -0.42
Global Ship Lease $162.48 million 0.32 $110.76 million ($1.36) -0.81

Danaos Corporation has higher revenue and earnings than Global Ship Lease. Global Ship Lease is trading at a lower price-to-earnings ratio than Danaos Corporation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

2.2% of Danaos Corporation shares are held by institutional investors. Comparatively, 5.3% of Global Ship Lease 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.

Risk & Volatility

Danaos Corporation has a beta of 1.29, suggesting that its share price is 29% more volatile than the S&P 500. Comparatively, Global Ship Lease has a beta of 1.33, suggesting that its share price is 33% more volatile than the S&P 500.

Summary

Danaos Corporation beats Global Ship Lease on 6 of the 10 factors compared between the two stocks.

Danaos Corporation Company Profile

Danaos Corporation is a holding company and an international owner of containerships, chartering its vessels to a range of liner companies. The Company’s principal business is the acquisition and operation of vessels. The Company conducts its operations through the vessel owning companies, whose principal activity is the ownership and operation of containerships that are under the management of a related party of the company. The Company’s manager is Danaos Shipping Company Limited (Danaos Shipping). The Company has a fleet of over 50 containerships aggregating approximately 329,590 twenty-foot equivalent units (TEUs). Its containership fleet includes approximately 53 containerships deployed on time charters and approximately two containerships deployed on bareboat charter. Gemini Shipholdings Corporation (Gemini), a company beneficially owned by the Company, owns approximately four additional containerships of over 24,000 TEU aggregate capacity.

Global Ship Lease Company Profile

Global Ship Lease, Inc. is a holding company and containership charter owner. The Company’s activity consists of the ownership and chartering out of containerships. It owns a fleet of containerships with a range of sizes. Its fleet comprises over 20 containerships, with a combined capacity of over 82,310 twenty-foot equivalent unit (TEU) and a weighted average age of over 11.0 years, and a non-weighted average age of over 11.3 years. Its vessels include CMA CGM Matisse, CMA CGM Utrillo, Delmas Keta, Julie Delmas, Kumasi, Marie Delmas, CMA CGM La Tour, CMA CGM Manet, CMA CGM Alcazar, CMA CGM Chateau d’If, CMA CGM Thalassa, CMA CGM Jamaica, CMA CGM Sambhar and CMA CGM America. Approximately 10 vessels are owned by companies incorporated in Cyprus; over four by companies incorporated in Hong Kong, and approximately one is held by another Marshall Islands company. Its subsidiary, Global Ship Lease Services Limited, provides administrative services.

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