Reviewing Hafnia (NYSE:HAFN) and Nordic American Tankers (NYSE:NAT)

Hafnia (NYSE:HAFN) and Nordic American Tankers (NYSE:NAT) are both transportation companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Insider and Institutional Ownership

44.3% of Nordic American Tankers shares are held by institutional investors. 2.9% of Nordic American Tankers shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility & Risk

Hafnia has a beta of 1.04, indicating that its stock price is 4% more volatile than the S&P 500. Comparatively, Nordic American Tankers has a beta of -0.43, indicating that its stock price is 143% less volatile than the S&P 500.

Dividends

Hafnia pays an annual dividend of $0.58 per share and has a dividend yield of 9.9%. Nordic American Tankers pays an annual dividend of $0.52 per share and has a dividend yield of 12.7%. Hafnia pays out 95.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nordic American Tankers pays out 2,600.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nordic American Tankers has increased its dividend for 1 consecutive years. Nordic American Tankers is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Hafnia and Nordic American Tankers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hafnia	0	1	0	1	3.00
Nordic American Tankers	0	3	0	0	2.00

Nordic American Tankers has a consensus target price of $3.25, indicating a potential downside of 20.83%. Given Nordic American Tankers’ higher probable upside, analysts clearly believe Nordic American Tankers is more favorable than Hafnia.

Earnings and Valuation

This table compares Hafnia and Nordic American Tankers”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hafnia	$2.22 billion	1.34	$774.03 million	$0.61	9.65
Nordic American Tankers	$225.10 million	3.86	$46.64 million	$0.02	205.25

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

Profitability

This table compares Hafnia and Nordic American Tankers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hafnia	29.50%	13.50%	8.46%
Nordic American Tankers	1.12%	0.39%	0.21%

Summary

Hafnia beats Nordic American Tankers on 10 of the 17 factors compared between the two stocks.

About Hafnia

Hafnia Limited owns and operates oil product tankers in Bermuda. It operates through Long Range II, Long Range I, Medium Range (MR), Handy size, and Specialized segments. The company transports clean and dirty, refined oil products, vegetable oil, and easy chemicals to national and international oil companies, and chemical companies, as well as trading and utility companies; and owns and operates 200 vessels. It provides ship owning, ship-management, investment, management, corporate support, and agency office services. In addition, the company provides integrated shipping platform, including technical management, commercial and chartering services, pool management, and large-scale bunker desk services. Hafnia Limited is based in Hamilton, Bermuda.

About Nordic American Tankers

Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 20 Suezmax crude oil tankers. The company was incorporated in 1995 and is headquartered in Hamilton, Bermuda.