Cool (NYSE:CLCO) vs. Global Ship Lease (NYSE:GSL) Financial Analysis

Global Ship Lease (NYSE:GSL) and Cool (NYSE:CLCO) are both small-cap transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.

Institutional and Insider Ownership

50.1% of Global Ship Lease shares are owned by institutional investors. Comparatively, 20.7% of Cool shares are owned by institutional investors. 7.4% of Global Ship Lease shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Global Ship Lease and Cool’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Ship Lease	53.62%	23.98%	14.94%
Cool	17.45%	7.94%	2.66%

Analyst Ratings

This is a summary of current recommendations and price targets for Global Ship Lease and Cool, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Ship Lease	0	2	2	0	2.50
Cool	1	3	0	0	1.75

Global Ship Lease presently has a consensus target price of $33.50, suggesting a potential downside of 7.69%. Given Global Ship Lease’s stronger consensus rating and higher probable upside, analysts plainly believe Global Ship Lease is more favorable than Cool.

Volatility and Risk

Global Ship Lease has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500. Comparatively, Cool has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500.

Dividends

Global Ship Lease pays an annual dividend of $2.50 per share and has a dividend yield of 6.9%. Cool pays an annual dividend of $0.15 per share and has a dividend yield of 1.6%. Global Ship Lease pays out 22.4% of its earnings in the form of a dividend. Cool pays out 25.0% 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. Global Ship Lease has increased its dividend for 2 consecutive years. Global Ship Lease is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Global Ship Lease and Cool”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Ship Lease	$711.05 million	1.83	$353.63 million	$11.14	3.26
Cool	$323.67 million	1.60	$98.14 million	$0.60	16.12

Global Ship Lease has higher revenue and earnings than Cool. Global Ship Lease is trading at a lower price-to-earnings ratio than Cool, indicating that it is currently the more affordable of the two stocks.

Summary

Global Ship Lease beats Cool on 16 of the 17 factors compared between the two stocks.

About Global Ship Lease

Global Ship Lease, Inc., together with its subsidiaries, engages in owning and chartering of containerships under fixed-rate charters to container shipping companies worldwide. As of March 11, 2024, it owned 68 mid-sized and smaller containerships, ranging from 2,207 to 11,040 twenty-foot equivalent unit (TEU), with an aggregate capacity of 375,406 TEU. The company was founded in 2007 and is based in Athens, Greece.

About Cool

Cool Company Ltd. engages in the acquisition, ownership, operation, and chartering of liquefied natural gas carriers (LNGCs). As of December 31, 2023, it owned a fleet of eleven LNGCs, including seven modern tri-fuel diesel electric vessels; two modern 2-stroke and two TFDE vessels; and managed 17 LNGCs and floating storage and regasification units for third parties. The company was founded in 1970 and is based in London, the United Kingdom.