Frontline (NYSE:FRO – Get Free Report) and KNOT Offshore Partners (NYSE:KNOP – Get Free Report) are both transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.
Insider & Institutional Ownership
22.7% of Frontline shares are owned by institutional investors. Comparatively, 26.8% of KNOT Offshore Partners shares are owned by institutional investors. 48.1% of Frontline shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Risk and Volatility
Frontline has a beta of 0.07, suggesting that its stock price is 93% less volatile than the S&P 500. Comparatively, KNOT Offshore Partners has a beta of -0.12, suggesting that its stock price is 112% less volatile than the S&P 500.
Analyst Ratings
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Frontline | 1 | 1 | 4 | 0 | 2.50 |
| KNOT Offshore Partners | 0 | 5 | 0 | 0 | 2.00 |
Frontline presently has a consensus price target of $25.87, indicating a potential downside of 16.26%. Given Frontline’s stronger consensus rating and higher possible upside, equities analysts plainly believe Frontline is more favorable than KNOT Offshore Partners.
Profitability
This table compares Frontline and KNOT Offshore Partners’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Frontline | 12.23% | 8.89% | 3.44% |
| KNOT Offshore Partners | 14.69% | 9.00% | 2.93% |
Dividends
Frontline pays an annual dividend of $0.76 per share and has a dividend yield of 2.5%. KNOT Offshore Partners pays an annual dividend of $0.10 per share and has a dividend yield of 1.0%. Frontline pays out 77.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. KNOT Offshore Partners pays out 6.5% of its earnings in the form of a dividend.
Valuation and Earnings
This table compares Frontline and KNOT Offshore Partners”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Frontline | $2.16 billion | 3.18 | $495.58 million | $0.98 | 31.53 |
| KNOT Offshore Partners | $318.60 million | N/A | $13.93 million | $1.55 | 6.67 |
Frontline has higher revenue and earnings than KNOT Offshore Partners. KNOT Offshore Partners is trading at a lower price-to-earnings ratio than Frontline, indicating that it is currently the more affordable of the two stocks.
Summary
Frontline beats KNOT Offshore Partners on 10 of the 15 factors compared between the two stocks.
About Frontline
Frontline plc, a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2022, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Limassol, Cyprus.
About KNOT Offshore Partners
KNOT Offshore Partners LP acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, and discharge of crude oil under time charters and bareboat charters. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.
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