Financial Analysis: Golar LNG (GLNG) versus Kirby (KEX)

Golar LNG (NASDAQ: GLNG) and Kirby (NYSE:KEX) are both mid-cap transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitability.

Volatility & Risk

Golar LNG has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500. Comparatively, Kirby has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Dividends

Golar LNG pays an annual dividend of $0.20 per share and has a dividend yield of 0.6%. Kirby does not pay a dividend. Golar LNG pays out -13.6% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Golar LNG and Kirby’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Golar LNG $143.54 million 24.47 -$179.70 million ($1.47) -23.63
Kirby $2.21 billion 2.45 $313.18 million $2.05 44.41

Kirby has higher revenue and earnings than Golar LNG. Golar LNG is trading at a lower price-to-earnings ratio than Kirby, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Golar LNG and Kirby’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Golar LNG -125.20% -8.11% -3.21%
Kirby 12.91% 4.35% 2.49%

Insider and Institutional Ownership

80.6% of Golar LNG shares are owned by institutional investors. Comparatively, 92.0% of Kirby shares are owned by institutional investors. 0.0% of Golar LNG shares are owned by company insiders. Comparatively, 2.4% of Kirby shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for Golar LNG and Kirby, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Golar LNG 0 1 5 0 2.83
Kirby 1 3 5 0 2.44

Golar LNG presently has a consensus target price of $38.40, suggesting a potential upside of 10.54%. Kirby has a consensus target price of $84.13, suggesting a potential downside of 7.61%. Given Golar LNG’s stronger consensus rating and higher possible upside, equities analysts clearly believe Golar LNG is more favorable than Kirby.

Summary

Kirby beats Golar LNG on 10 of the 15 factors compared between the two stocks.

Golar LNG Company Profile

Golar LNG Limited, a midstream liquefied natural gas (LNG) company, engages in the transportation, regasification, and liquefaction of LNG. It operates through three segments: Vessel operations, Floating Liquefaction Natural Gas Vessel (FLNG), and Power. The company engages in the acquisition, ownership, operation, and chartering of LNG carriers and floating storage regasification units (FSRUs); and the development of LNG projects. As of April 6, 2018, Golar LNG Limited, together with Golar LNG Partners LP and Golar Power Limited, owned and operated a fleet of 26 vessels, including 18 LNG carriers, 7 FSRUs, and 1 FLNG. The company was founded in 1946 and is headquartered in Hamilton, Bermuda.

Kirby Company Profile

Kirby Corporation operates domestic tank barges in the United States. It operates in two segments, Marine Transportation and Distribution and Services. The Marine Transportation segment provides marine transportation services and towing vessels transporting bulk liquid products, as well as operates tank barges throughout the Mississippi River System, on the Gulf Intracoastal Waterway, coastwise along three United States coasts, and in Alaska and Hawaii. This segment also transports petrochemicals, black oil, refined petroleum products, and agricultural chemicals by tank barges; and operates offshore dry-bulk barge and tugboat units that are engaged in the offshore transportation of dry-bulk cargoes in the United States coastal trade. It serves oil refining and petrochemical companies. As of February 23, 2018, this segment owned or operated 998 inland tank barges with 22.0 million barrels of capacity, 302 inland towboats, 56 coastal tank barges with 5.4 million barrels of capacity, 53 coastal tugboats, 5 offshore dry-bulk cargo barges, 5 offshore tugboats, and 1 docking tugboat. The Distribution and Services segment sells replacement parts; provides service mechanics to overhaul and repair medium-speed and high-speed diesel engines, transmissions, reduction gears, and related oilfield services equipment; rebuilds component parts or diesel engines, transmissions, reduction gears, and related equipment used in oilfield services, marine, mining, power generation, on-highway, and other industrial applications; rents generators, fork lifts, and pumps and compressors; and manufactures and remanufactures pressure pumping units. It serves oilfield service, on-highway transportation, marine transportation, construction, and power generation companies, and the United States government. The company was formerly known as Kirby Exploration Company, Inc. and changed its name to Kirby Corporation in 1990. Kirby Corporation was founded in 1921 and is headquartered in Houston, Texas.

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