Tourmaline Oil (OTCMKTS:TRMLF) vs. Ardmore Shipping (NYSE:ASC) Critical Review

Ardmore Shipping (NYSE:ASC) and Tourmaline Oil (OTCMKTS:TRMLF) are both energy companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, analyst recommendations, earnings, profitability and risk.

Profitability

This table compares Ardmore Shipping and Tourmaline Oil’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ardmore Shipping	29.67%	15.24%	12.72%
Tourmaline Oil	6.05%	9.05%	6.25%

Valuation & Earnings

This table compares Ardmore Shipping and Tourmaline Oil”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ardmore Shipping	$310.20 million	2.45	$41.01 million	$2.59	7.19
Tourmaline Oil	$4.72 billion	3.58	$187.99 million	$0.72	60.35

Tourmaline Oil has higher revenue and earnings than Ardmore Shipping. Ardmore Shipping is trading at a lower price-to-earnings ratio than Tourmaline Oil, indicating that it is currently the more affordable of the two stocks.

Dividends

Ardmore Shipping pays an annual dividend of $3.16 per share and has a dividend yield of 17.0%. Tourmaline Oil pays an annual dividend of $1.44 per share and has a dividend yield of 3.3%. Ardmore Shipping pays out 122.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tourmaline Oil pays out 200.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ardmore Shipping is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a breakdown of current recommendations for Ardmore Shipping and Tourmaline Oil, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ardmore Shipping	0	2	2	0	2.50
Tourmaline Oil	0	6	4	1	2.55

Ardmore Shipping presently has a consensus price target of $17.00, suggesting a potential downside of 8.73%. Tourmaline Oil has a consensus price target of $65.00, suggesting a potential upside of 49.60%. Given Tourmaline Oil’s stronger consensus rating and higher possible upside, analysts plainly believe Tourmaline Oil is more favorable than Ardmore Shipping.

Institutional and Insider Ownership

62.2% of Ardmore Shipping shares are owned by institutional investors. Comparatively, 1.8% of Tourmaline Oil shares are owned by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Risk and Volatility

Ardmore Shipping has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500. Comparatively, Tourmaline Oil has a beta of -0.24, meaning that its share price is 124% less volatile than the S&P 500.

About Ardmore Shipping

Ardmore Shipping Corporation engages in the seaborne transportation of petroleum products and chemicals worldwide. The company's fleet consists of 22 owned vessels including 21 Eco-design and 1 Eco-mod vessel, and four chartered-in vessels. It serves oil majors, oil companies, oil and chemical traders, chemical companies, and pooling service providers. Ardmore Shipping Corporation was founded in 2010 and is headquartered in Pembroke, Bermuda.

About Tourmaline Oil

Tourmaline Oil Corp. explores for and develops oil and natural gas properties in the Western Canadian Sedimentary Basin. The company holds interests in properties located in the Alberta Deep Basin, Northeast British Columbia Montney, and the Peace River High Triassic oil complex. Tourmaline Oil Corp. was incorporated in 2008 and is headquartered in Calgary, Canada.