Scorpio Bulkers (NYSE: SALT) and Baltic Trading (NYSE:BALT) are both small-cap transportation companies, but which is the superior business? We will compare the two businesses based on the strength of their institutional ownership, valuation, earnings, profitability, analyst recommendations, dividends and risk.

Insider and Institutional Ownership

40.3% of Scorpio Bulkers shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Scorpio Bulkers and Baltic Trading, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scorpio Bulkers 0 2 4 0 2.67
Baltic Trading 0 0 0 0 N/A

Scorpio Bulkers presently has a consensus target price of $10.17, suggesting a potential upside of 32.03%. Given Scorpio Bulkers’ higher probable upside, equities analysts clearly believe Scorpio Bulkers is more favorable than Baltic Trading.

Risk and Volatility

Scorpio Bulkers has a beta of 3.57, indicating that its share price is 257% more volatile than the S&P 500. Comparatively, Baltic Trading has a beta of 1.33, indicating that its share price is 33% more volatile than the S&P 500.

Dividends

Scorpio Bulkers pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Baltic Trading does not pay a dividend. Scorpio Bulkers pays out -1.8% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Scorpio Bulkers and Baltic Trading’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Scorpio Bulkers $78.40 million 7.41 -$124.83 million ($1.11) -6.94
Baltic Trading N/A N/A N/A ($1.14) -1.37

Baltic Trading has lower revenue, but higher earnings than Scorpio Bulkers. Scorpio 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 Scorpio Bulkers and Baltic Trading’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scorpio Bulkers -57.43% -6.51% -3.97%
Baltic Trading -613.08% -49.39% -30.66%

Summary

Scorpio Bulkers beats Baltic Trading on 11 of the 12 factors compared between the two stocks.

Scorpio Bulkers Company Profile

Scorpio Bulkers Inc. is a shipping company. The Company owns and operates newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 deadweight tons (dwt). The Company operates through two segments: Kamsarmax and Ultramax. Its Kamsarmax segment includes vessels ranging from approximately 77,500 DWT to 98,700 DWT. Its Ultramax segment includes vessels ranging from approximately 60,200 DWT to 64,000 DWT. All of its owned vessels have carrying capacities of greater than 60,000 dwt. Its vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes, and are employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of December 31, 2016, its operating fleet of 48 vessels consisted of 47 drybulk vessels and one chartered-in drybulk vessel. It also has a contract for the construction of one newbuilding drybulk vessel.

Baltic Trading Company Profile

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.

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