Diana Shipping inc. (NYSE: DSX) and Euroseas (NASDAQ:ESEA) are both small-cap deep sea freight companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, profitability, dividends, analyst recommendations, valuation and institutional ownership.

Profitability

This table compares Diana Shipping inc. and Euroseas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diana Shipping inc. -122.29% -14.80% -9.26%
Euroseas -70.00% -13.81% -4.84%

Earnings and Valuation

This table compares Diana Shipping inc. and Euroseas’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Diana Shipping inc. $114.26 million 3.73 -$164.23 million ($1.90) -2.12
Euroseas $28.42 million 0.72 -$44.22 million ($3.02) -0.61

Euroseas has higher revenue, but lower earnings than Diana Shipping inc.. Diana Shipping inc. is trading at a lower price-to-earnings ratio than Euroseas, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent ratings and price targets for Diana Shipping inc. and Euroseas, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diana Shipping inc. 0 5 3 0 2.38
Euroseas 0 0 1 0 3.00

Diana Shipping inc. presently has a consensus target price of $5.10, indicating a potential upside of 26.87%. Euroseas has a consensus target price of $3.00, indicating a potential upside of 63.93%. Given Euroseas’ stronger consensus rating and higher possible upside, analysts clearly believe Euroseas is more favorable than Diana Shipping inc..

Risk & Volatility

Diana Shipping inc. has a beta of 1.65, meaning that its share price is 65% more volatile than the S&P 500. Comparatively, Euroseas has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.

Institutional & Insider Ownership

37.8% of Diana Shipping inc. shares are held by institutional investors. Comparatively, 2.3% of Euroseas shares are held by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Euroseas beats Diana Shipping inc. on 7 of the 12 factors compared between the two stocks.

About Diana Shipping inc.

Diana Shipping Inc. is a holding company. The Company is a provider of shipping transportation services. The Company specializes in the ownership of dry bulk vessels. As of February 16, 2017, the Company’s operating fleet consisted of 48 dry bulk carriers, of which 23 were Panamax, four were Kamsarmax, three were Post-Panamax, 14 were Capesize and four were Newcastlemax vessels, having a combined carrying capacity of approximately 5.7 million deadweight tonnage (dwt). As of February 16, 2017, the Company’s fleet included Danae, Dione, Nirefs, Alcyon, Triton, Thetis, Protefs, Calipso, Clio, Erato, Coronis, Melite, Leto, Artemis, Selina, Atalandi, Maia, Medusa, Norfolk, Aliki, Semirio, Boston, Seattle, Santa Barbara, New Orleans, Los Angeles, San Francisco and Newport News. The Company charters its dry bulk carriers to customers primarily pursuant to time charters.

About Euroseas

Euroseas Ltd. is engaged in the shipping business. The Company is an owner and operator of drybulk and container carrier vessels and is a provider of seaborne transportation for drybulk and containerized cargoes. Eurobulk Ltd. manages the Company’s operations. The Company also owns and operates dry bulk carriers that transport major bulks, such as iron ore, coal and grains, and minor bulks, such as bauxite, phosphate and fertilizers. The Company has a fleet of 12 vessels, including Kamsarmax drybulk carrier, Panamax drybulk carriers and Handymax drybulk carrier, Intermediate containerships, Handysize containerships, and Feeder containerships. The Company’s five drybulk carriers have a total cargo capacity of 351,272 deadweight tons (dwt), and its seven containerships have a cargo capacity of 11,828 twenty-foot equivalent units (teu).

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