Critical Contrast: Capital Product Partners (CPLP) versus Hornbeck Offshore Services (HOS)
Capital Product Partners (NASDAQ: CPLP) and Hornbeck Offshore Services (NYSE:HOS) are both small-cap industrials companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, institutional ownership, dividends, profitability, valuation and analyst recommendations.
Volatility and Risk
Capital Product Partners has a beta of 1.58, indicating that its stock price is 58% more volatile than the S&P 500. Comparatively, Hornbeck Offshore Services has a beta of 1.29, indicating that its stock price is 29% more volatile than the S&P 500.
Institutional and Insider Ownership
19.3% of Capital Product Partners shares are held by institutional investors. Comparatively, 77.6% of Hornbeck Offshore Services shares are held by institutional investors. 7.1% of Hornbeck Offshore Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.
This is a summary of recent recommendations for Capital Product Partners and Hornbeck Offshore Services, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Capital Product Partners||0||0||3||0||3.00|
|Hornbeck Offshore Services||0||3||0||0||2.00|
Capital Product Partners presently has a consensus target price of $5.00, suggesting a potential upside of 56.74%. Hornbeck Offshore Services has a consensus target price of $3.50, suggesting a potential upside of 6.06%. Given Capital Product Partners’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Capital Product Partners is more favorable than Hornbeck Offshore Services.
This table compares Capital Product Partners and Hornbeck Offshore Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Capital Product Partners||17.17%||4.70%||2.67%|
|Hornbeck Offshore Services||-48.34%||-7.00%||-3.43%|
Capital Product Partners pays an annual dividend of $0.32 per share and has a dividend yield of 10.0%. Hornbeck Offshore Services does not pay a dividend. Capital Product Partners pays out 114.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.
Earnings and Valuation
This table compares Capital Product Partners and Hornbeck Offshore Services’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capital Product Partners||$241.62 million||1.67||$52.48 million||$0.28||11.39|
|Hornbeck Offshore Services||$224.30 million||0.55||-$63.84 million||($2.33)||-1.42|
Capital Product Partners has higher revenue and earnings than Hornbeck Offshore Services. Hornbeck Offshore Services is trading at a lower price-to-earnings ratio than Capital Product Partners, indicating that it is currently the more affordable of the two stocks.
Capital Product Partners beats Hornbeck Offshore Services on 12 of the 15 factors compared between the two stocks.
About Capital Product Partners
Capital Product Partners L.P. is an international owner of tanker, container and drybulk vessels. The Company’s fleet consisted of 36 high specification vessels with an average age of approximately 7.4 years, as of December 31, 2016. As of December 31, 2016, its fleet consisted of four Suezmax crude oil tankers, 21 medium range product tankers, 10 post-panamax container carrier vessels and one Capesize bulk carrier. The Company’s vessels are capable of carrying a range of cargoes, including crude oil, refined oil products, such as gasoline, diesel, fuel oil and jet fuel, edible oils and certain chemicals, such as ethanol, as well as dry cargo and containerized goods. Its fleet consists of product tankers, such as Aktoras, Aiolos, Agisilaos, Akeraios and Apostolos; crude tankers, such as Amoureux, Aias, Amore Mio II and Miltiadis M II; drybulk vessels, such as Cape Agamemnon, and container carrier vessels, such as Archimidis, Agamemnon and Hyundai Platinum.
About Hornbeck Offshore Services
Hornbeck Offshore Services Inc. provides marine transportation, subsea installation and accommodation support services to exploration and production, oilfield service, offshore construction and the United States military customers. The Company focuses on providing marine solutions for the deepwater and ultradeepwater energy industry in domestic and select foreign locations. The Company, through its subsidiaries, operates offshore supply vessels (OSVs), multi-purpose support vessels (MPSVs), and a shore-base facility to provide logistics support and specialty services to the offshore oil and gas exploration and production industry, primarily in the United States, Gulf of Mexico, Latin America and selected international markets. Its OSVs and MPSVs support the deep-well, deepwater and ultra-deepwater activities of the offshore oil and gas industry. It provides vessel management services for other vessel owners, such as crewing, daily operational management and maintenance activities.
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