Reviewing Scorpio Tankers (NYSE:STNG) and Flex LNG (NYSE:FLNG)

Scorpio Tankers (NYSE:STNG) and Flex LNG (NYSE:FLNG) are both transportation companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Dividends

Scorpio Tankers pays an annual dividend of $1.68 per share and has a dividend yield of 3.3%. Flex LNG pays an annual dividend of $3.00 per share and has a dividend yield of 12.1%. Scorpio Tankers pays out 28.4% of its earnings in the form of a dividend. Flex LNG pays out 163.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Scorpio Tankers has increased its dividend for 2 consecutive years.

Earnings & Valuation

This table compares Scorpio Tankers and Flex LNG”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scorpio Tankers	$1.24 billion	2.12	$668.77 million	$5.91	8.73
Flex LNG	$356.35 million	3.74	$117.68 million	$1.83	13.53

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

Profitability

This table compares Scorpio Tankers and Flex LNG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scorpio Tankers	32.01%	7.42%	5.56%
Flex LNG	28.06%	14.04%	4.09%

Institutional and Insider Ownership

54.6% of Scorpio Tankers shares are owned by institutional investors. 7.3% of Scorpio Tankers shares are owned by company insiders. Comparatively, 0.3% of Flex LNG shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk & Volatility

Scorpio Tankers has a beta of -0.3, suggesting that its share price is 130% less volatile than the S&P 500. Comparatively, Flex LNG has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Scorpio Tankers and Flex LNG, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scorpio Tankers	0	3	4	1	2.75
Flex LNG	0	3	0	0	2.00

Scorpio Tankers presently has a consensus target price of $69.20, indicating a potential upside of 34.11%. Flex LNG has a consensus target price of $23.00, indicating a potential downside of 7.11%. Given Scorpio Tankers’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Scorpio Tankers is more favorable than Flex LNG.

Summary

Scorpio Tankers beats Flex LNG on 13 of the 18 factors compared between the two stocks.

About Scorpio Tankers

Scorpio Tankers Inc., together with its subsidiaries, engages in the seaborne transportation of crude oi and refined petroleum products in the shipping markets worldwide. As of March 21, 2024, its fleet consisted of 110 owned and leases financed tanker, including 39 LR2, 57 MR, and 14 Handymax with a weighted average age of approximately 8.1 years. Scorpio Tankers Inc. was incorporated in 2009 and is headquartered in Monaco.

About Flex LNG

FLEX LNG Ltd. engages in the seaborne transportation of liquefied natural gas (LPG) through the ownership and operation of LNG carriers. The company was founded by Philip Eystein Fjeld, Trym Tveitnes and Jostein Ueland in September 2006 and is headquartered in Hamilton, Bermuda.