Critical Analysis: Frontline (FRO) versus StealthGas (GASS)

Frontline (NYSE: FRO) and StealthGas (NASDAQ:GASS) are both small-cap transportation companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, earnings, valuation, dividends, risk, profitability and institutional ownership.

Earnings & Valuation

This table compares Frontline and StealthGas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Frontline $646.33 million 1.24 -$264.86 million ($0.03) -157.33
StealthGas $154.31 million 1.06 -$1.21 million $0.14 29.22



StealthGas has lower revenue, but higher earnings than Frontline. Frontline is trading at a lower price-to-earnings ratio than StealthGas, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

14.4% of Frontline shares are held by institutional investors. Comparatively, 59.8% of StealthGas shares are held by institutional investors. 48.1% of Frontline shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Frontline pays an annual dividend of $0.15 per share and has a dividend yield of 3.2%. StealthGas does not pay a dividend. Frontline pays out -500.0% of its earnings in the form of a dividend. Frontline has increased its dividend for 2 consecutive years.

Risk & Volatility

Frontline has a beta of 1.72, meaning that its share price is 72% more volatile than the S&P 500. Comparatively, StealthGas has a beta of 1.55, meaning that its share price is 55% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Frontline and StealthGas, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Frontline 1 1 2 0 2.25
StealthGas 0 0 1 0 3.00

Frontline presently has a consensus price target of $5.67, indicating a potential upside of 20.06%. StealthGas has a consensus price target of $7.00, indicating a potential upside of 71.12%. Given StealthGas’ stronger consensus rating and higher possible upside, analysts plainly believe StealthGas is more favorable than Frontline.

Profitability

This table compares Frontline and StealthGas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Frontline -40.98% -0.31% -0.14%
StealthGas -0.79% 0.93% 0.53%

Summary

StealthGas beats Frontline on 9 of the 17 factors compared between the two stocks.

About Frontline

Frontline Ltd., a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. As of December 31, 2017, the company's fleet consisted of 61 vessels, including VLCC, Suezmax, and LR2/Aframax tankers with an aggregate capacity of approximately 11.6 million deadweight ton. It is also involved in the charter, purchase, and sale of vessels. The company is based in Hamilton, Bermuda.

About StealthGas

StealthGas Inc., together with its subsidiaries, provides seaborne transportation services to liquefied petroleum gas (LPG) producers and users worldwide. It also provides crude oil and product carriers chartered to oil producers, refiners, and commodities traders. The company carries various petroleum gas products in liquefied form, including propane, butane, butadiene, isopropane, propylene, and vinyl chloride monomer; refined petroleum products, such as gasoline, diesel, fuel oil, and jet fuel, as well as edible oils and chemicals; and crude oil. As of April 1, 2017, it had a fleet of 51 LPG carriers. The company was founded in 2004 and is based in Athens, Greece.

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