Critical Review: Golar LNG (GLNG) vs. Its Peers

Golar LNG (NASDAQ:GLNG) is one of 1,051 public companies in the “Oil, Gas & Consumable Fuels” industry, but how does it compare to its peers? We will compare Golar LNG to similar businesses based on the strength of its analyst recommendations, earnings, institutional ownership, profitability, risk, valuation and dividends.

Dividends

Golar LNG pays an annual dividend of $1.00 per share and has a dividend yield of 2.3%. Golar LNG pays out 62.5% of its earnings in the form of a dividend. As a group, “Oil, Gas & Consumable Fuels” companies pay a dividend yield of 9.2% and pay out -133.8% of their earnings in the form of a dividend. Golar LNG has increased its dividend for 2 consecutive years. Golar LNG lags its peers as a dividend stock, given its lower dividend yield and higher payout ratio.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Golar LNG and its peers, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Golar LNG	0	1	4	1	3.00
Golar LNG Competitors	5984	27008	40878	2428	2.52

Golar LNG presently has a consensus price target of $68.67, indicating a potential upside of 58.01%. As a group, “Oil, Gas & Consumable Fuels” companies have a potential upside of 28.75%. Given Golar LNG’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Golar LNG is more favorable than its peers.

Institutional and Insider Ownership

92.2% of Golar LNG shares are owned by institutional investors. Comparatively, 30.7% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by institutional investors. 0.0% of Golar LNG shares are owned by company insiders. Comparatively, 15.5% of shares of all “Oil, Gas & Consumable Fuels” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Golar LNG and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Golar LNG	31.27%	8.91%	3.75%
Golar LNG Competitors	-456.99%	19.35%	6.42%

Volatility & Risk

Golar LNG has a beta of 0.15, suggesting that its stock price is 85% less volatile than the S&P 500. Comparatively, Golar LNG’s peers have a beta of -3.76, suggesting that their average stock price is 476% less volatile than the S&P 500.

Valuation & Earnings

This table compares Golar LNG and its peers top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Golar LNG	$393.52 million	$65.68 million	27.16
Golar LNG Competitors	$10.89 billion	$5.51 billion	-1.05

Golar LNG’s peers have higher revenue and earnings than Golar LNG. Golar LNG is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Summary

Golar LNG beats its peers on 8 of the 15 factors compared.

About Golar LNG

Golar LNG Limited is an international provider of liquefied natural gas (LNG) infrastructure, with a primary focus on floating LNG (FLNG) technology. The company develops and operates floating facilities that process natural gas offshore and convert it into LNG for transport to customers. Its business includes FLNG vessel ownership and operations, along with related project development and infrastructure services. By locating liquefaction facilities near offshore gas resources, Golar aims to help bring gas reserves to market without relying solely on onshore processing plants.