Financial Analysis: SFL (NYSE:SFL) & Martin Midstream Partners (NASDAQ:MMLP)

SFL (NYSE:SFL) and Martin Midstream Partners (NASDAQ:MMLP) are both small-cap transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, dividends, risk, institutional ownership, valuation, earnings and analyst recommendations.

Insider & Institutional Ownership

28.6% of SFL shares are owned by institutional investors. Comparatively, 34.9% of Martin Midstream Partners shares are owned by institutional investors. 17.0% of Martin Midstream Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Risk & Volatility

SFL has a beta of 0.39, indicating that its share price is 61% less volatile than the S&P 500. Comparatively, Martin Midstream Partners has a beta of 0.57, indicating that its share price is 43% less volatile than the S&P 500.

Profitability

This table compares SFL and Martin Midstream Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SFL	-3.61%	-0.30%	-0.08%
Martin Midstream Partners	-2.06%	N/A	-2.67%

Valuation and Earnings

This table compares SFL and Martin Midstream Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SFL	$733.04 million	2.15	-$26.43 million	($0.20)	-54.58
Martin Midstream Partners	$716.11 million	0.15	-$14.74 million	($0.37)	-7.48

Martin Midstream Partners has lower revenue, but higher earnings than SFL. SFL is trading at a lower price-to-earnings ratio than Martin Midstream Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

SFL pays an annual dividend of $0.80 per share and has a dividend yield of 7.3%. Martin Midstream Partners pays an annual dividend of $0.02 per share and has a dividend yield of 0.7%. SFL pays out -400.0% of its earnings in the form of a dividend. Martin Midstream Partners pays out -5.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. SFL has increased its dividend for 1 consecutive years. SFL is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current recommendations for SFL and Martin Midstream Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SFL	0	1	1	0	2.50
Martin Midstream Partners	1	1	0	0	1.50

SFL currently has a consensus target price of $12.00, indicating a potential upside of 9.94%. Martin Midstream Partners has a consensus target price of $3.00, indicating a potential upside of 8.38%. Given SFL’s stronger consensus rating and higher probable upside, analysts plainly believe SFL is more favorable than Martin Midstream Partners.

Summary

SFL beats Martin Midstream Partners on 10 of the 17 factors compared between the two stocks.

About SFL

SFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters. The company operates in various sectors of the maritime, and shipping and offshore industries, including oil transportation, dry bulk shipments, chemical transportation, oil products transportation, container transportation, car transportation, and drilling rigs. As of December 31, 2023, the company owned seven crude oil carriers, six oil product tankers, 15 dry bulk carriers, 32 container vessels, one jack-up drilling rig, one ultra-deepwater drilling rig, and five car carriers. It primarily operates in Bermuda, Canada, Cyprus, Liberia, Namibia, Norway, Singapore, the United Kingdom, and the Marshall Islands. The company was formerly known as Ship Finance International Limited and changed its name to SFL Corporation Ltd. in September 2019. SFL Corporation Ltd. was founded in 2003 and is based in Hamilton, Bermuda.

About Martin Midstream Partners

Martin Midstream Partners L.P., together with its subsidiaries, provides terminalling, processing, storage, and packaging services for petroleum products and by-products primarily in the United States. The company operates in four segments: Terminalling and Storage, Transportation, Sulfur Services, and Specialty Products. The company's Terminalling and Storage segment owns or operates various marine shore-based terminal facilities and specialty terminal facilities that provide storage, refining, blending, packaging, and handling services for producers and suppliers of petroleum products and by-products. This segment also offers land rental services to oil and gas companies, as well as storage and handling services for lubricants and fuels. Its Transportation segment operates various trucks and tank trailers; and inland marine tank barges, inland push boats, and articulated offshore tug and barge unit to transport petroleum products and by-products, petrochemicals, and chemicals. The company's Sulfur Services segment processes molten sulfur into prilled or pelletized sulfur, which is used in the production of fertilizers and industrial chemicals. Its Specialty Products segment stores, distributes, and transports natural gas liquids for wholesale deliveries to refineries, industrial natural gas liquid users, and propane retailers. Martin Midstream GP LLC serves as a general partner of the company. Martin Midstream Partners L.P. was incorporated in 2002 and is based in Kilgore, Texas.