Critical Analysis: Golar LNG (NASDAQ:GLNG) and SFL (NYSE:SFL)

Golar LNG (NASDAQ:GLNG) and SFL (NYSE:SFL) are both energy companies, but which is the superior business? We will compare the two businesses based on the strength of their profitability, dividends, institutional ownership, analyst recommendations, valuation, earnings and risk.

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Golar LNG	$393.52 million	13.42	$65.68 million	$1.60	32.57
SFL	$733.04 million	2.53	-$26.43 million	$0.48	26.77

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Golar LNG and SFL, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golar LNG	0	2	4	1	2.86
SFL	0	1	2	0	2.67

Golar LNG currently has a consensus target price of $63.00, suggesting a potential upside of 20.87%. SFL has a consensus target price of $14.00, suggesting a potential upside of 8.95%. Given Golar LNG’s stronger consensus rating and higher probable upside, analysts plainly believe Golar LNG is more favorable than SFL.

Risk & Volatility

Golar LNG has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500. Comparatively, SFL has a beta of 0.4, meaning that its share price is 60% less volatile than the S&P 500.

Profitability

This table compares Golar LNG and SFL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golar LNG	31.27%	8.91%	3.75%
SFL	8.76%	3.41%	0.92%

Dividends

Golar LNG pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. SFL pays an annual dividend of $0.88 per share and has a dividend yield of 6.8%. Golar LNG pays out 62.5% of its earnings in the form of a dividend. SFL pays out 183.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Golar LNG has raised its dividend for 2 consecutive years and SFL has raised its dividend for 1 consecutive years.

Institutional & Insider Ownership

92.2% of Golar LNG shares are owned by institutional investors. Comparatively, 28.6% of SFL shares are owned by institutional investors. 0.0% of Golar LNG shares are owned by company 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

Golar LNG beats SFL on 15 of the 18 factors compared between the two stocks.

About Golar LNG

Golar LNG Limited designs, converts, owns, and operates marine infrastructure for the liquefaction of natural gas. The company operates through three segments: FLNG, Corporate and Other, and Shipping. It engages in the regasification, storage, and offloading of liquefied natural gas (LNG); operation of floating liquefaction natural gas (FLNG) vessels or projects; transportation of LNG carriers; and vessel management activities. Golar LNG Limited was founded in 1946 and is headquartered in Hamilton, Bermuda.

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.