Hoegh LNG Partners (NYSE: HMLP) and KNOT Offshore Partners (NYSE:KNOP) are both small-cap transportation companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Institutional and Insider Ownership

64.1% of Hoegh LNG Partners shares are owned by institutional investors. Comparatively, 43.8% of KNOT Offshore Partners shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Hoegh LNG Partners and KNOT Offshore Partners’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hoegh LNG Partners $91.11 million 3.94 $41.37 million $1.57 11.56
KNOT Offshore Partners $173.67 million 3.82 $59.84 million $2.38 8.53

KNOT Offshore Partners has higher revenue and earnings than Hoegh LNG Partners. KNOT Offshore Partners is trading at a lower price-to-earnings ratio than Hoegh LNG Partners, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Hoegh LNG Partners and KNOT Offshore Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hoegh LNG Partners 0 0 3 0 3.00
KNOT Offshore Partners 0 0 0 0 N/A

Hoegh LNG Partners presently has a consensus target price of $21.50, indicating a potential upside of 18.46%. Given Hoegh LNG Partners’ higher possible upside, research analysts plainly believe Hoegh LNG Partners is more favorable than KNOT Offshore Partners.

Profitability

This table compares Hoegh LNG Partners and KNOT Offshore Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hoegh LNG Partners 38.90% 7.77% 3.30%
KNOT Offshore Partners 34.02% 11.18% 4.40%

Dividends

Hoegh LNG Partners pays an annual dividend of $1.72 per share and has a dividend yield of 9.5%. KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 10.2%. Hoegh LNG Partners pays out 109.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KNOT Offshore Partners pays out 87.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hoegh LNG Partners has raised its dividend for 3 consecutive years. KNOT Offshore Partners is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Hoegh LNG Partners has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, KNOT Offshore Partners has a beta of 0.7, suggesting that its share price is 30% less volatile than the S&P 500.

Summary

Hoegh LNG Partners beats KNOT Offshore Partners on 8 of the 15 factors compared between the two stocks.

About Hoegh LNG Partners

Hoegh LNG Partners LP owns, operates and acquires floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers and other LNG infrastructure assets under long-term charters. The Company’s segments include Majority held FSRUs, Joint venture FSRUs and other. The Majority held FSRUs segment includes the direct financing lease related to the PT Perusahaan Gas Negara (Persero) Tbk (PGN) FSRU Lampung and the operating lease related to the Hoegh Gallant. The Joint venture FSRUs segment includes approximately two FSRUs, including the GDF Suez LNG Supply S.A. (GDF Suez) Neptune and the GDF Suez Cape Ann, which operate under long term time charters. The Company intends to acquire newbuilding FSRUs on long-term charters, rather than FSRUs based on retrofitted, first-generation LNG carriers. The PGN FSRU Lampung is located offshore in the Lampung province at the southeast coast of Sumatra, Indonesia.

About KNOT Offshore Partners

KNOT Offshore Partners LP (KNOT Offshore Partners or the Partnership), owns, operates and acquires shuttle tankers under long-term charters. The Partnership’s vessels in its fleet are chartered to Statoil ASA (Statoil), Petrobras Transporte S.A. (Transpetro), Repsol Sinopec Brasil, S.A. (Repsol), Royal Dutch Shell plc, ExxonMobil, and Eni Trading and Shipping S.p.A. (ENI). As of March 17, 2017, the Company had a fleet of 12 shuttle tankers. Its shuttle tankers include Fortaleza Knutsen, Recife Knutsen, Bodil Knutsen and Dan Cisne. KNOT Offshore Partners GP LLC is the general partner of the Partnership. It is engaged in the loading, transportation and storage of the crude oil using the vessels in its fleet. It provides all of these services under time charters and bareboat charters. As of December 31, 2016, eight of its shuttle tankers were chartered under time charters and four of its shuttle tankers were chartered under bareboat charters.

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