Torm (NASDAQ:TRMD) vs. Icahn Enterprises (NASDAQ:IEP) Financial Analysis

Icahn Enterprises (NASDAQ:IEP) and Torm (NASDAQ:TRMD) are both mid-cap energy companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, valuation, analyst recommendations, earnings, risk and institutional ownership.

Volatility and Risk

Icahn Enterprises has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Torm has a beta of 0.07, meaning that its share price is 93% less volatile than the S&P 500.

Profitability

This table compares Icahn Enterprises and Torm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Icahn Enterprises	-4.81%	-17.99%	-3.72%
Torm	35.51%	27.24%	17.96%

Insider and Institutional Ownership

87.1% of Icahn Enterprises shares are owned by institutional investors. Comparatively, 73.9% of Torm shares are owned by institutional investors. 90.1% of Icahn Enterprises shares are owned by company insiders. Comparatively, 0.4% of Torm shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Icahn Enterprises and Torm, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Icahn Enterprises	1	0	0	0	1.00
Torm	0	2	1	1	2.75

Torm has a consensus target price of $38.00, suggesting a potential downside of 5.00%. Given Torm’s stronger consensus rating and higher probable upside, analysts plainly believe Torm is more favorable than Icahn Enterprises.

Valuation and Earnings

This table compares Icahn Enterprises and Torm”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Icahn Enterprises	$9.66 billion	0.49	-$299.00 million	($0.74)	-9.01
Torm	$1.76 billion	2.32	$285.30 million	$6.07	6.59

Torm has lower revenue, but higher earnings than Icahn Enterprises. Icahn Enterprises is trading at a lower price-to-earnings ratio than Torm, indicating that it is currently the more affordable of the two stocks.

Dividends

Icahn Enterprises pays an annual dividend of $2.00 per share and has a dividend yield of 30.0%. Torm pays an annual dividend of $7.00 per share and has a dividend yield of 17.5%. Icahn Enterprises pays out -270.3% of its earnings in the form of a dividend. Torm pays out 115.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Icahn Enterprises is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Torm beats Icahn Enterprises on 11 of the 17 factors compared between the two stocks.

About Icahn Enterprises

Icahn Enterprises L.P., through its subsidiaries, engages in the investment, energy, automotive, food packaging, real estate, home fashion, and pharma businesses in the United States and Internationally. The Investment segment invests its proprietary capital through various private investment funds. This segment provides investment advisory and other related services. The Energy segment refines and markets transportation fuels in the form of gasoline and diesel fuels, as well as renewable diesel; and manufactures nitrogen fertilizers in the form of urea ammonium nitrate and ammonia. The Automotive segment sells automotive parts and materials, and retailed merchandise; offers automotive repair and maintenance services; and leases real estate properties. The Food Packaging segment produces and sells cellulosic, fibrous, and plastic casings that are used to prepare and package processed meat products. The Real Estate segment is involved in the leasing of land, retail, office, and industrial properties; the development and sale of single-family homes; and the operation of country clubs. The Home Fashion segment manufactures, sources, markets, distributes, and sells home fashion consumer products. The Pharma segment offers pharmaceutical products and services. The company was incorporated in 1987 and is headquartered in Sunny Isles Beach, Florida.

About Torm

TORM plc, a shipping company, owns and operates a fleet of product tankers in the United Kingdom. It operates in two operating segments, Tanker and Marine Exhaust. The Tanker segment transports refined oil products, such as gasoline, jet fuel, kerosene, naphtha, and gas oil, as well as dirty petroleum products, including fuel oil. The Marine Exhaust segment engages in developing and producing advanced and green marine equipment. TORM plc was founded in 1889 and is based in London, the United Kingdom.