DHT (DHT) vs. Hoegh LNG Partners (HMLP) Critical Comparison

DHT (NYSE: DHT) and Hoegh LNG Partners (NYSE:HMLP) are both small-cap energy companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for DHT and Hoegh LNG Partners, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DHT 0 1 2 0 2.67
Hoegh LNG Partners 0 0 5 0 3.00

DHT presently has a consensus target price of $6.00, suggesting a potential upside of 64.38%. Hoegh LNG Partners has a consensus target price of $21.63, suggesting a potential upside of 23.22%. Given DHT’s higher possible upside, equities analysts clearly believe DHT is more favorable than Hoegh LNG Partners.

Valuation & Earnings

This table compares DHT and Hoegh LNG Partners’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
DHT $290.70 million 1.79 $9.25 million $0.32 11.41
Hoegh LNG Partners $91.11 million 3.81 $41.37 million $1.57 11.18

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

Insider and Institutional Ownership

35.7% of DHT shares are held by institutional investors. Comparatively, 64.1% of Hoegh LNG Partners shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Dividends

DHT pays an annual dividend of $0.08 per share and has a dividend yield of 2.2%. Hoegh LNG Partners pays an annual dividend of $1.72 per share and has a dividend yield of 9.8%. DHT pays out 25.0% of its earnings in the form of a dividend. Hoegh LNG Partners pays out 109.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hoegh LNG Partners has increased its dividend for 2 consecutive years. Hoegh LNG Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

DHT has a beta of 0.92, indicating that its share price is 8% less volatile than the S&P 500. Comparatively, Hoegh LNG Partners has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Profitability

This table compares DHT and Hoegh LNG Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DHT 9.68% 4.84% 2.47%
Hoegh LNG Partners 38.90% 7.77% 3.30%

Summary

Hoegh LNG Partners beats DHT on 13 of the 16 factors compared between the two stocks.

DHT Company Profile

DHT Holdings, Inc. operates a fleet of crude oil tankers. As of March 21, 2017, the Company’s fleet consisted of 21 crude oil tankers in operation. As of March 21, 2017, the Company’s fleet consisted of 19 very large crude carriers (VLCCs), which are tankers ranging in size from 200,000 to 320,000 deadweight tons (dwt), and two Aframax tankers (Aframaxes), which are tankers ranging in size from 80,000 to 120,000 dwt. As of December 31, 2016, the Company’s fleet in operation had a combined carrying capacity of 6,087,095 dwt. As of March 21, 2017, the Company’s VLCCs included DHT Ann, DHT Eagle, DHT Phoenix, DHT Hawk, DHT Condor, DHT Scandinavia, DHT China, DHT Amazon, DHT Redwood, DHT Sundarbans, DHT Taiga, DHT Leopard, DHT Lion, DHT Panther and DHT Puma. As of March 21, 2017, the Company’s Aframaxes are DHT Cathy and DHT Sophie.

Hoegh LNG Partners Company Profile

Hoegh LNG Partners LP owns, operates and acquires floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers and other LNG infrastructure assets under long-term charters. The Company’s segments include Majority held FSRUs, Joint venture FSRUs and other. The Majority held FSRUs segment includes the direct financing lease related to the PT Perusahaan Gas Negara (Persero) Tbk (PGN) FSRU Lampung and the operating lease related to the Hoegh Gallant. The Joint venture FSRUs segment includes approximately two FSRUs, including the GDF Suez LNG Supply S.A. (GDF Suez) Neptune and the GDF Suez Cape Ann, which operate under long term time charters. The Company intends to acquire newbuilding FSRUs on long-term charters, rather than FSRUs based on retrofitted, first-generation LNG carriers. The PGN FSRU Lampung is located offshore in the Lampung province at the southeast coast of Sumatra, Indonesia.

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