Costamare (NYSE: CMRE) and Scorpio Bulkers (NYSE:SALT) are both small-cap transportation companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Valuation and Earnings

This table compares Costamare and Scorpio Bulkers’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Costamare $438.93 million 1.45 $280.04 million $0.38 15.82
Scorpio Bulkers $123.25 million 4.37 $610,000.00 ($1.26) -5.95

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

Volatility & Risk

Costamare has a beta of 2.22, meaning that its stock price is 122% more volatile than the S&P 500. Comparatively, Scorpio Bulkers has a beta of 3.65, meaning that its stock price is 265% more volatile than the S&P 500.

Dividends

Costamare pays an annual dividend of $0.40 per share and has a dividend yield of 6.7%. Scorpio Bulkers does not pay a dividend. Costamare pays out 105.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

27.0% of Costamare shares are owned by institutional investors. Comparatively, 44.0% of Scorpio Bulkers shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations for Costamare and Scorpio Bulkers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Costamare 0 4 3 0 2.43
Scorpio Bulkers 0 2 4 0 2.67

Costamare presently has a consensus price target of $8.50, indicating a potential upside of 41.43%. Scorpio Bulkers has a consensus price target of $9.54, indicating a potential upside of 27.22%. Given Costamare’s higher possible upside, equities research analysts clearly believe Costamare is more favorable than Scorpio Bulkers.

Profitability

This table compares Costamare and Scorpio Bulkers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Costamare 12.70% 8.94% 3.83%
Scorpio Bulkers -72.87% -7.52% -4.58%

Summary

Costamare beats Scorpio Bulkers on 8 of the 14 factors compared between the two stocks.

Costamare Company Profile

Costamare Inc. (Costamare) is a holding company. The Company is an international owner of containerships. The Company is engaged in chartering its vessels to various liner companies. The Company provides marine transportation services around the world by chartering its container vessels to liner operators under long, medium and short-term time charters. As of March 10, 2017, the Company had a fleet of 69 containerships with a total capacity of approximately 456,000 TEU, including five newbuilds on order. The Company’s fleet of vessels includes Cosco Guangzhou, Titan, Cosco Yantian, Valor, Valiant and Maersk Kobe. Its subsidiaries include Adele Shipping Co., Bastian Shipping Co., Cadence Shipping Co., Jodie Shipping Co. and Kayley Shipping Co.

Scorpio Bulkers Company Profile

Scorpio Bulkers Inc. is a shipping company. The Company owns and operates newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 deadweight tons (dwt). The Company operates through two segments: Kamsarmax and Ultramax. Its Kamsarmax segment includes vessels ranging from approximately 77,500 DWT to 98,700 DWT. Its Ultramax segment includes vessels ranging from approximately 60,200 DWT to 64,000 DWT. All of its owned vessels have carrying capacities of greater than 60,000 dwt. Its vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes, and are employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of December 31, 2016, its operating fleet of 48 vessels consisted of 47 drybulk vessels and one chartered-in drybulk vessel. It also has a contract for the construction of one newbuilding drybulk vessel.

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