Costamare (NYSE: CMRE) and Global Ship Lease (NYSE:GSL) are both small-cap deep sea freight companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Dividends

Costamare pays an annual dividend of $0.40 per share and has a dividend yield of 6.8%. Global Ship Lease does not pay a dividend. Costamare pays out 111.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

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

Net Margins Return on Equity Return on Assets
Costamare 14.03% 7.57% 3.41%
Global Ship Lease -18.63% 3.08% 1.36%

Earnings and Valuation

This table compares Costamare and Global Ship Lease’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Costamare $468.19 million 1.35 $81.70 million $0.36 16.39
Global Ship Lease $166.52 million 0.37 -$65.09 million ($0.59) -2.17

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

Analyst Ratings

This is a breakdown of current ratings and price targets for Costamare and Global Ship Lease, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Costamare 0 3 2 0 2.40
Global Ship Lease 0 0 0 0 N/A

Costamare presently has a consensus price target of $7.10, suggesting a potential upside of 20.34%. Given Costamare’s higher possible upside, analysts clearly believe Costamare is more favorable than Global Ship Lease.

Institutional & Insider Ownership

26.3% of Costamare shares are owned by institutional investors. Comparatively, 5.3% of Global Ship Lease shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Costamare has a beta of 2.14, meaning that its stock price is 114% more volatile than the S&P 500. Comparatively, Global Ship Lease has a beta of 1.42, meaning that its stock price is 42% more volatile than the S&P 500.

Summary

Costamare beats Global Ship Lease on 12 of the 14 factors compared between the two stocks.

About Costamare

Costamare Inc. (Costamare) is a holding company. The Company is an international owner of containerships. The Company is engaged in chartering its vessels to various liner companies. The Company provides marine transportation services around the world by chartering its container vessels to liner operators under long, medium and short-term time charters. As of March 10, 2017, the Company had a fleet of 69 containerships with a total capacity of approximately 456,000 TEU, including five newbuilds on order. The Company’s fleet of vessels includes Cosco Guangzhou, Titan, Cosco Yantian, Valor, Valiant and Maersk Kobe. Its subsidiaries include Adele Shipping Co., Bastian Shipping Co., Cadence Shipping Co., Jodie Shipping Co. and Kayley Shipping Co.

About Global Ship Lease

Global Ship Lease, Inc. is a holding company and containership charter owner. The Company’s activity consists of the ownership and chartering out of containerships. It owns a fleet of containerships with a range of sizes. Its fleet comprises over 20 containerships, with a combined capacity of over 82,310 twenty-foot equivalent unit (TEU) and a weighted average age of over 11.0 years, and a non-weighted average age of over 11.3 years. Its vessels include CMA CGM Matisse, CMA CGM Utrillo, Delmas Keta, Julie Delmas, Kumasi, Marie Delmas, CMA CGM La Tour, CMA CGM Manet, CMA CGM Alcazar, CMA CGM Chateau d’If, CMA CGM Thalassa, CMA CGM Jamaica, CMA CGM Sambhar and CMA CGM America. Approximately 10 vessels are owned by companies incorporated in Cyprus; over four by companies incorporated in Hong Kong, and approximately one is held by another Marshall Islands company. Its subsidiary, Global Ship Lease Services Limited, provides administrative services.

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