Star Bulk Carriers Corp. (SBLK) & Diana Shipping inc. (DSX) Critical Analysis

Star Bulk Carriers Corp. (NASDAQ: SBLK) and Diana Shipping inc. (NYSE:DSX) are both small-cap transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, earnings, valuation, institutional ownership, risk and dividends.

Profitability

This table compares Star Bulk Carriers Corp. and Diana Shipping inc.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Star Bulk Carriers Corp. -36.90% -5.54% -2.83%
Diana Shipping inc. -122.29% -14.80% -9.26%

Volatility and Risk

Star Bulk Carriers Corp. has a beta of 2.84, suggesting that its share price is 184% more volatile than the S&P 500. Comparatively, Diana Shipping inc. has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500.

Institutional & Insider Ownership

73.8% of Star Bulk Carriers Corp. shares are held by institutional investors. Comparatively, 37.3% of Diana Shipping inc. shares are held by institutional investors. 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.

Analyst Ratings

This is a summary of current recommendations and price targets for Star Bulk Carriers Corp. and Diana Shipping inc., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Star Bulk Carriers Corp. 0 1 6 0 2.86
Diana Shipping inc. 0 3 3 0 2.50

Star Bulk Carriers Corp. presently has a consensus target price of $13.20, suggesting a potential upside of 28.03%. Diana Shipping inc. has a consensus target price of $5.19, suggesting a potential upside of 28.40%. Given Diana Shipping inc.’s higher probable upside, analysts clearly believe Diana Shipping inc. is more favorable than Star Bulk Carriers Corp..

Earnings and Valuation

This table compares Star Bulk Carriers Corp. and Diana Shipping inc.’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Star Bulk Carriers Corp. $266.62 million 2.45 $59.28 million ($1.86) -5.54
Diana Shipping inc. $124.18 million 3.15 -$403,499.00 ($1.90) -2.13

Star Bulk Carriers Corp. has higher revenue and earnings than Diana Shipping inc.. Star Bulk Carriers Corp. is trading at a lower price-to-earnings ratio than Diana Shipping inc., indicating that it is currently the more affordable of the two stocks.

Summary

Star Bulk Carriers Corp. beats Diana Shipping inc. on 10 of the 12 factors compared between the two stocks.

About Star Bulk Carriers Corp.

Star Bulk Carriers Corp. is an international shipping company. The Company owns and operates a fleet of dry bulk carrier vessels. As of December 31, 2016, the Company’s fleet included 73 vessels consisting primarily of Newcastlemax and Capesize, as well as Kamsarmax, Ultramax and Supramax vessels with a carrying capacity between 52,055 and 209,537 deadweight tonnage (dwt). The Company’s vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes across the world. The Company’s fleet, which emphasizes Capesize vessels, primarily transports minerals from the Americas and Australia to East Asia, particularly China, as well as Japan, South Korea, Taiwan, Indonesia and Malaysia. The Company’s Supramax vessels carry minerals, grain products and steel between the Americas, Europe, Africa, Australia and Indonesia, and from these areas to China, Japan, South Korea, Taiwan, the Philippines and Malaysia.

About Diana Shipping inc.

Diana Shipping Inc. is a holding company. The Company is a provider of shipping transportation services. The Company specializes in the ownership of dry bulk vessels. As of February 16, 2017, the Company’s operating fleet consisted of 48 dry bulk carriers, of which 23 were Panamax, four were Kamsarmax, three were Post-Panamax, 14 were Capesize and four were Newcastlemax vessels, having a combined carrying capacity of approximately 5.7 million deadweight tonnage (dwt). As of February 16, 2017, the Company’s fleet included Danae, Dione, Nirefs, Alcyon, Triton, Thetis, Protefs, Calipso, Clio, Erato, Coronis, Melite, Leto, Artemis, Selina, Atalandi, Maia, Medusa, Norfolk, Aliki, Semirio, Boston, Seattle, Santa Barbara, New Orleans, Los Angeles, San Francisco and Newport News. The Company charters its dry bulk carriers to customers primarily pursuant to time charters.

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