Danaos Corporation (DAC) vs. Tsakos Energy Navigation (TNP) Financial Analysis

Danaos Corporation (NYSE: DAC) and Tsakos Energy Navigation (NYSE:TNP) are both small-cap deep sea freight companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Valuation and Earnings

This table compares Danaos Corporation and Tsakos Energy Navigation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Danaos Corporation $498.33 million 0.35 -$366.19 million ($3.79) -0.42
Tsakos Energy Navigation $481.79 million 0.79 $55.78 million $0.21 21.24

Tsakos Energy Navigation has higher revenue, but lower earnings than Danaos Corporation. Danaos Corporation is trading at a lower price-to-earnings ratio than Tsakos Energy Navigation, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

1.9% of Danaos Corporation shares are held by institutional investors. Comparatively, 26.5% of Tsakos Energy Navigation shares are held by institutional investors. 1.0% of Tsakos Energy Navigation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Risk & Volatility

Danaos Corporation has a beta of 1.33, indicating that its stock price is 33% more volatile than the S&P 500. Comparatively, Tsakos Energy Navigation has a beta of 1.61, indicating that its stock price is 61% more volatile than the S&P 500.

Profitability

This table compares Danaos Corporation and Tsakos Energy Navigation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Danaos Corporation -85.72% 21.68% 3.50%
Tsakos Energy Navigation 6.86% 2.39% 1.04%

Analyst Ratings

This is a breakdown of current ratings and price targets for Danaos Corporation and Tsakos Energy Navigation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Danaos Corporation 0 2 0 0 2.00
Tsakos Energy Navigation 0 2 7 0 2.78

Danaos Corporation presently has a consensus price target of $3.00, suggesting a potential upside of 87.50%. Tsakos Energy Navigation has a consensus price target of $5.75, suggesting a potential upside of 28.92%. Given Danaos Corporation’s higher possible upside, analysts clearly believe Danaos Corporation is more favorable than Tsakos Energy Navigation.

Dividends

Tsakos Energy Navigation pays an annual dividend of $0.20 per share and has a dividend yield of 4.5%. Danaos Corporation does not pay a dividend. Tsakos Energy Navigation pays out 95.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Tsakos Energy Navigation beats Danaos Corporation on 11 of the 16 factors compared between the two stocks.

Danaos Corporation Company Profile

Danaos Corporation is a holding company and an international owner of containerships, chartering its vessels to a range of liner companies. The Company’s principal business is the acquisition and operation of vessels. The Company conducts its operations through the vessel owning companies, whose principal activity is the ownership and operation of containerships that are under the management of a related party of the company. The Company’s manager is Danaos Shipping Company Limited (Danaos Shipping). The Company has a fleet of over 50 containerships aggregating approximately 329,590 twenty-foot equivalent units (TEUs). Its containership fleet includes approximately 53 containerships deployed on time charters and approximately two containerships deployed on bareboat charter. Gemini Shipholdings Corporation (Gemini), a company beneficially owned by the Company, owns approximately four additional containerships of over 24,000 TEU aggregate capacity.

Tsakos Energy Navigation Company Profile

Tsakos Energy Navigation Ltd is a provider of international seaborne crude oil and petroleum product transportation services. The Company operates through maritime transportation of liquid energy related products segment. It operates a fleet of approximately 57 modern crude oil and petroleum product tankers that provide marine transportation services for national and other independent oil companies and refiners under long, medium and short-term charters. Its fleet also includes a liquefied natural gas (LNG) carrier and over two shuttle suezmax tankers with dynamic positioning technology (DP2). This fleet diversity includes a range of sister ships. The Company’s fleet consists of 65 double-hull vessels totaling 7.2 million deadweight tonnage. Its diversified fleet, which includes VLCC, suezmax, aframax, panamax, handysize, handymax tankers, LNG carrier and DP2 shuttle tankers, allows it to serve its customers’ international petroleum product and crude oil transportation needs.

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