Analyzing Seaspan Corporation (NYSE:SSW) & Safe Bulkers (SB)

Seaspan Corporation (NYSE: SSW) and Safe Bulkers (NYSE:SB) are both small-cap transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, profitability, earnings, institutional ownership and dividends.

Earnings and Valuation

This table compares Seaspan Corporation and Safe Bulkers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Seaspan Corporation $844.00 million 0.98 $501.00 million ($1.67) -4.19
Safe Bulkers $127.17 million 2.68 $59.75 million ($0.57) -5.89

Seaspan Corporation has higher revenue and earnings than Safe Bulkers. Safe Bulkers is trading at a lower price-to-earnings ratio than Seaspan Corporation, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Seaspan Corporation has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500. Comparatively, Safe Bulkers has a beta of 2.34, meaning that its share price is 134% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Seaspan Corporation and Safe Bulkers, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Seaspan Corporation 3 6 0 0 1.67
Safe Bulkers 0 4 3 0 2.43

Seaspan Corporation currently has a consensus target price of $6.79, suggesting a potential downside of 2.92%. Safe Bulkers has a consensus target price of $3.19, suggesting a potential downside of 5.13%. Given Seaspan Corporation’s higher possible upside, equities analysts clearly believe Seaspan Corporation is more favorable than Safe Bulkers.

Profitability

This table compares Seaspan Corporation and Safe Bulkers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Seaspan Corporation -13.54% 7.51% 2.36%
Safe Bulkers -26.74% -3.34% -1.61%

Institutional and Insider Ownership

15.3% of Seaspan Corporation shares are held by institutional investors. Comparatively, 19.0% of Safe Bulkers shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Dividends

Seaspan Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 7.2%. Safe Bulkers does not pay a dividend. Seaspan Corporation pays out -29.9% of its earnings in the form of a dividend. Seaspan Corporation has raised its dividend for 5 consecutive years and Safe Bulkers has raised its dividend for 3 consecutive years.

Summary

Seaspan Corporation beats Safe Bulkers on 9 of the 15 factors compared between the two stocks.

About Seaspan Corporation

Seaspan Corporation is an independent charter owner and manager of containerships. The Company charters pursuant to long-term, fixed-rate time charters with various container liner companies. As of February 20, 2017, it had operated a fleet of 88 containerships and had entered into contracts for the purchase of an additional eight new building containerships. Its operating vessels include YM Wish, YM Wellhead, YM Witness, COSCO Glory, COSCO Development, COSCO Harmony, COSCO Excellence, COSCO Hope, COSCO Fortune, Seaspan Yangtze, CSCL Zeebrugge, CSCL Long Beach, CSCL Oceania, COSCO Vietnam, MOL Emissary, Seaspan Chiwan, Seaspan Ningbo, Seaspan Felixstowe, CSCL Brisbane, Seaspan Santos, Seaspan Loncomilla, Seaspan Lingue, CSCL Montevideo, CSCL Callao, Guayaquil Bridge and Calicanto Bridge. The Company is engaged in the operation and management of vessel, including maintaining the vessel, periodic dry-docking, cleaning and painting and performing work required by regulations.

About Safe Bulkers

Safe Bulkers, Inc. is a holding company. The Company’s principal business is the acquisition, ownership and operation of drybulk vessels. The Company’s vessels operate across the world, carrying drybulk cargo for the consumers of marine drybulk transportation services. The Company is an international provider of marine drybulk transportation services, transporting bulk cargoes, particularly coal, grain and iron ore, along shipping routes across the world. As of February 17, 2017 the Company’s fleet included 38 vessels, of which 14 are Panamax class vessels, nine are Kamsarmax class vessels, 12 are Post-Panamax class vessels and three are Capesize class vessels, with an aggregate carrying capacity of 3,421,800 deadweight tonnage (dwt). The Company’s fleet of Post-Panamax vessels includes Marina, Xenia, Sophia, Eleni, Martine, Andreas K, Panayiota K, Venus Heritage, Venus History, Venus Horizon and Troodos Sun. Its fleet of Capesize vessels includes Kanaris, Pelopidas and Lake Despina.

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