Enbridge Energy Management (NYSE: EEQ) and Ship Finance International (NYSE:SFL) are both small-cap oils/energy companies, but which is the better business? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, analyst recommendations, earnings and valuation.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Enbridge Energy Management and Ship Finance International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Enbridge Energy Management 1 1 0 0 1.50
Ship Finance International 1 1 1 0 2.00

Enbridge Energy Management currently has a consensus target price of $18.00, indicating a potential upside of 43.08%. Ship Finance International has a consensus target price of $15.00, indicating a potential upside of 3.81%. Given Enbridge Energy Management’s higher possible upside, equities analysts clearly believe Enbridge Energy Management is more favorable than Ship Finance International.

Dividends

Ship Finance International pays an annual dividend of $1.40 per share and has a dividend yield of 9.7%. Enbridge Energy Management does not pay a dividend. Ship Finance International pays out 141.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ship Finance International has raised its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Enbridge Energy Management and Ship Finance International’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Enbridge Energy Management N/A N/A -$120.10 million ($0.08) -165.20
Ship Finance International $412.95 million 3.55 $146.40 million $0.99 14.60

Ship Finance International has higher revenue and earnings than Enbridge Energy Management. Enbridge Energy Management is trading at a lower price-to-earnings ratio than Ship Finance International, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Enbridge Energy Management and Ship Finance International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Enbridge Energy Management N/A -800.00% -800.00%
Ship Finance International 28.66% 11.02% 4.01%

Volatility & Risk

Enbridge Energy Management has a beta of 1.16, meaning that its stock price is 16% more volatile than the S&P 500. Comparatively, Ship Finance International has a beta of 1.37, meaning that its stock price is 37% more volatile than the S&P 500.

Institutional and Insider Ownership

75.1% of Enbridge Energy Management shares are owned by institutional investors. Comparatively, 30.6% of Ship Finance International shares are owned by institutional investors. 0.3% of Enbridge Energy Management shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

Ship Finance International beats Enbridge Energy Management on 12 of the 16 factors compared between the two stocks.

About Enbridge Energy Management

Enbridge Energy Management, L.L.C. is a limited partner of Enbridge Energy Partners, L.P. (the Partnership). The Company owns i-units, a special class of the Partnership’s limited partner interests. The Company manages the business of the Partnership. The Partnership owns and operates crude oil and liquid petroleum transportation and storage assets, and natural gas gathering, treating, processing, transportation and marketing assets in the United States.

About Ship Finance International

Ship Finance International Limited is a holding, and international ship owning and chartering company. The Company is engaged in the ownership and operation of vessels and offshore related assets, and also involved in the charter, purchase and sale of assets. Its assets consist of approximately 20 oil tankers, over 20 dry bulk carriers, approximately 20 container vessels, including a newbuilding, two car carriers, two jack-up drilling rigs, two ultra-deepwater drilling units, five offshore supply vessels, two chemical tankers and two newbuilding oil product tankers. Its oil tankers, chemical tankers and oil product tankers are all double-hull vessels. It has over nine asset types, including crude oil tankers, oil product tankers, chemical tankers, container vessels, car carriers, dry bulk carriers, jack-up drilling rigs, ultra-deepwater drilling units and offshore supply vessels. Its assets consist of a fleet of Suezmax tankers, crude carriers and oil/bulk/ore carriers.

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