Baltic Trading (NYSE: BALT) and Safe Bulkers (NYSE:SB) are both small-cap industrials companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, risk, profitability and earnings.

Insider & Institutional Ownership

20.1% of Safe Bulkers shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings and target prices for Baltic Trading and Safe Bulkers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Baltic Trading 0 0 0 0 N/A
Safe Bulkers 1 3 3 0 2.29

Safe Bulkers has a consensus target price of $3.10, suggesting a potential downside of 14.36%. Given Safe Bulkers’ higher probable upside, analysts clearly believe Safe Bulkers is more favorable than Baltic Trading.

Volatility & Risk

Baltic Trading has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Safe Bulkers has a beta of 2.27, indicating that its stock price is 127% more volatile than the S&P 500.

Earnings & Valuation

This table compares Baltic Trading and Safe Bulkers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Baltic Trading N/A N/A N/A ($1.14) -1.37
Safe Bulkers $109.77 million 3.35 -$55.96 million ($0.19) -19.05

Baltic Trading has higher earnings, but lower revenue than Safe Bulkers. Safe Bulkers is trading at a lower price-to-earnings ratio than Baltic Trading, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Baltic Trading and Safe Bulkers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Baltic Trading -613.08% -49.39% -30.66%
Safe Bulkers -2.01% -2.10% -1.01%

Summary

Safe Bulkers beats Baltic Trading on 9 of the 10 factors compared between the two stocks.

About Baltic Trading

Baltic Trading Limited is a shipping business focused on the drybulk industry spot market. The Company’s fleet consists of four Capesize vessels, two Ultramax vessels, four Supramax vessels and five Handysize vessels with an aggregate carrying capacity of approximately 1,221,000 deadweight tons. Its fleet contains six groups of sister ships, which are vessels of virtually identical sizes and specifications. It operates a fleet of drybulk ships that transport iron ore, coal, grain, steel products and other drybulk cargoes along shipping routes around the world. It operates its vessels on spot market-related time charters, short-term time charters or in vessel pools trading in the spot market. Genco Shipping & Trading Limited (Genco) serves as the Company’s manager. Genco provides it with commercial and strategic management of its fleet.

About Safe Bulkers

Safe Bulkers, Inc. is a holding company. The Company’s principal business is the acquisition, ownership and operation of drybulk vessels. The Company’s vessels operate across the world, carrying drybulk cargo for the consumers of marine drybulk transportation services. The Company is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along shipping routes across the world. As of February 17, 2017 the Company’s fleet included 38 vessels, of which 14 are Panamax class vessels, nine are Kamsarmax class vessels, 12 are Post-Panamax class vessels and three are Capesize class vessels, with an aggregate carrying capacity of 3,421,800 deadweight tonnage (dwt). The Company’s fleet of Post-Panamax vessels includes Marina, Xenia, Sophia, Eleni, Martine, Andreas K, Panayiota K, Venus Heritage, Venus History, Venus Horizon and Troodos Sun. Its fleet of Capesize vessels includes Kanaris, Pelopidas and Lake Despina.

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