Financial Review: Scorpio Tankers (NYSE:STNG) versus Martin Midstream Partners (NASDAQ:MMLP)

Scorpio Tankers (NYSE:STNG) and Martin Midstream Partners (NASDAQ:MMLP) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Dividends

Scorpio Tankers pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. Martin Midstream Partners pays an annual dividend of $0.02 per share and has a dividend yield of 0.8%. Scorpio Tankers pays out 17.7% of its earnings in the form of a dividend. Martin Midstream Partners pays out -3.9% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Scorpio Tankers has raised its dividend for 2 consecutive years. Scorpio Tankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Volatility and Risk

Scorpio Tankers has a beta of -0.26, indicating that its stock price is 126% less volatile than the S&P 500. Comparatively, Martin Midstream Partners has a beta of 0.51, indicating that its stock price is 49% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Scorpio Tankers and Martin Midstream Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Scorpio Tankers	0	3	6	1	2.80
Martin Midstream Partners	1	1	0	0	1.50

Scorpio Tankers presently has a consensus target price of $93.50, suggesting a potential upside of 22.74%. Martin Midstream Partners has a consensus target price of $3.00, suggesting a potential upside of 15.38%. Given Scorpio Tankers’ stronger consensus rating and higher possible upside, equities analysts clearly believe Scorpio Tankers is more favorable than Martin Midstream Partners.

Profitability

This table compares Scorpio Tankers and Martin Midstream Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Scorpio Tankers	48.44%	11.72%	9.28%
Martin Midstream Partners	-2.88%	N/A	-3.93%

Insider & Institutional Ownership

54.6% of Scorpio Tankers shares are held by institutional investors. Comparatively, 34.9% of Martin Midstream Partners shares are held by institutional investors. 7.3% of Scorpio Tankers shares are held by company insiders. Comparatively, 17.0% of Martin Midstream Partners shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Scorpio Tankers and Martin Midstream Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Scorpio Tankers	$938.22 million	4.09	$344.29 million	$10.17	7.49
Martin Midstream Partners	$716.11 million	0.14	-$14.74 million	($0.51)	-5.10

Scorpio Tankers has higher revenue and earnings than Martin Midstream Partners. Martin Midstream Partners is trading at a lower price-to-earnings ratio than Scorpio Tankers, indicating that it is currently the more affordable of the two stocks.

Summary

Scorpio Tankers beats Martin Midstream Partners on 15 of the 18 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 Martin Midstream Partners

Martin Midstream Partners L.P., together with its subsidiaries, provides terminalling, processing, storage, and packaging services for petroleum products and by-products primarily in the United States. The company operates in four segments: Terminalling and Storage, Transportation, Sulfur Services, and Specialty Products. The company's Terminalling and Storage segment owns or operates various marine shore-based terminal facilities and specialty terminal facilities that provide storage, refining, blending, packaging, and handling services for producers and suppliers of petroleum products and by-products. This segment also offers land rental services to oil and gas companies, as well as storage and handling services for lubricants and fuels. Its Transportation segment operates various trucks and tank trailers; and inland marine tank barges, inland push boats, and articulated offshore tug and barge unit to transport petroleum products and by-products, petrochemicals, and chemicals. The company's Sulfur Services segment processes molten sulfur into prilled or pelletized sulfur, which is used in the production of fertilizers and industrial chemicals. Its Specialty Products segment stores, distributes, and transports natural gas liquids for wholesale deliveries to refineries, industrial natural gas liquid users, and propane retailers. Martin Midstream GP LLC serves as a general partner of the company. Martin Midstream Partners L.P. was incorporated in 2002 and is based in Kilgore, Texas.