Analyzing Scorpio Tankers (NYSE:STNG) & Himalaya Shipping (NYSE:HSHP)

Scorpio Tankers (NYSE:STNG) and Himalaya Shipping (NYSE:HSHP) are both transportation companies, but which is the better stock? We will contrast the two businesses based on the strength of their dividends, valuation, risk, earnings, profitability, institutional ownership and analyst recommendations.

Institutional and Insider Ownership

54.6% of Scorpio Tankers shares are owned by institutional investors. Comparatively, 22.3% of Himalaya Shipping shares are owned by institutional investors. 7.3% of Scorpio Tankers shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings for Scorpio Tankers and Himalaya Shipping, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scorpio Tankers	0	3	3	0	2.50
Himalaya Shipping	1	0	0	0	1.00

Scorpio Tankers presently has a consensus target price of $76.40, suggesting a potential upside of 42.22%. Given Scorpio Tankers’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Scorpio Tankers is more favorable than Himalaya Shipping.

Dividends

Scorpio Tankers pays an annual dividend of $1.60 per share and has a dividend yield of 3.0%. Himalaya Shipping pays an annual dividend of $0.20 per share and has a dividend yield of 2.7%. Scorpio Tankers pays out 11.5% of its earnings in the form of a dividend.

Earnings and Valuation

This table compares Scorpio Tankers and Himalaya Shipping”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scorpio Tankers	$1.34 billion	2.02	$546.90 million	$13.95	3.85
Himalaya Shipping	$112.30 million	2.60	$1.51 million	N/A	N/A

Scorpio Tankers has higher revenue and earnings than Himalaya Shipping.

Risk and Volatility

Scorpio Tankers has a beta of 0.18, meaning that its share price is 82% less volatile than the S&P 500. Comparatively, Himalaya Shipping has a beta of 2.63, meaning that its share price is 163% more volatile than the S&P 500.

Profitability

This table compares Scorpio Tankers and Himalaya Shipping’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scorpio Tankers	52.40%	22.56%	15.35%
Himalaya Shipping	21.93%	15.72%	3.14%

Summary

Scorpio Tankers beats Himalaya Shipping on 11 of the 14 factors compared between the two stocks.

About Scorpio Tankers

Scorpio Tankers Inc., together with its subsidiaries, engages in the seaborne transportation of crude oi and refined petroleum products in the shipping markets worldwide. As of March 21, 2024, its fleet consisted of 110 owned and leases financed tanker, including 39 LR2, 57 MR, and 14 Handymax with a weighted average age of approximately 8.1 years. Scorpio Tankers Inc. was incorporated in 2009 and is headquartered in Monaco.

About Himalaya Shipping

Himalaya Shipping Ltd. provides dry bulk shipping services worldwide. The company operates a fleet of vessels. It serves major commodity trading, commodity and energy transition, and multi-modal transport companies. Himalaya Shipping Ltd. was incorporated in 2021 and is based in Hamilton, Bermuda.