Torm (NASDAQ:TRMD) & KNOT Offshore Partners (NYSE:KNOP) Critical Survey

Torm (NASDAQ:TRMD) and KNOT Offshore Partners (NYSE:KNOP) are both energy companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Torm and KNOT Offshore Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Torm	0	2	1	1	2.75
KNOT Offshore Partners	0	3	1	1	2.60

Torm presently has a consensus target price of $38.00, indicating a potential upside of 8.02%. KNOT Offshore Partners has a consensus target price of $14.00, indicating a potential upside of 23.13%. Given KNOT Offshore Partners’ higher probable upside, analysts clearly believe KNOT Offshore Partners is more favorable than Torm.

Dividends

Torm pays an annual dividend of $2.04 per share and has a dividend yield of 5.8%. KNOT Offshore Partners pays an annual dividend of $0.30 per share and has a dividend yield of 2.6%. Torm pays out 33.6% of its earnings in the form of a dividend. KNOT Offshore Partners pays out 68.2% 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. Torm is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Torm has a beta of 0.12, indicating that its stock price is 88% less volatile than the S&P 500. Comparatively, KNOT Offshore Partners has a beta of -0.05, indicating that its stock price is 105% less volatile than the S&P 500.

Earnings & Valuation

This table compares Torm and KNOT Offshore Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Torm	$1.34 billion	2.68	$285.30 million	$6.07	5.80
KNOT Offshore Partners	$364.44 million	1.05	$22.96 million	$0.44	25.84

Torm has higher revenue and earnings than KNOT Offshore Partners. Torm is trading at a lower price-to-earnings ratio than KNOT Offshore Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Torm and KNOT Offshore Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Torm	35.51%	27.24%	17.96%
KNOT Offshore Partners	3.90%	5.73%	1.84%

Insider & Institutional Ownership

73.9% of Torm shares are held by institutional investors. Comparatively, 26.8% of KNOT Offshore Partners shares are held by institutional investors. 0.4% of Torm shares are held 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

Torm beats KNOT Offshore Partners on 13 of the 15 factors compared between the two stocks.

About Torm

TORM plc, a shipping company, owns and operates a fleet of product tankers in the United Kingdom. It operates in two operating segments, Tanker and Marine Exhaust. The Tanker segment transports refined oil products, such as gasoline, jet fuel, kerosene, naphtha, and gas oil, as well as dirty petroleum products, including fuel oil. The Marine Exhaust segment engages in developing and producing advanced and green marine equipment. TORM plc was founded in 1889 and is based in London, the United Kingdom.

About KNOT Offshore Partners

KNOT Offshore Partners LP acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, and discharge of crude oil under time charters and bareboat charters. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.