Frontline (NYSE:FRO – Get Free Report) and Himalaya Shipping (NYSE:HSHP – Get Free Report) are both transportation companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, earnings, profitability, institutional ownership, risk, valuation and analyst recommendations.
Insider & Institutional Ownership
22.7% of Frontline shares are held by institutional investors. Comparatively, 22.3% of Himalaya Shipping shares are held by institutional investors. 48.1% of Frontline shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Valuation & Earnings
This table compares Frontline and Himalaya Shipping”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Frontline | $2.05 billion | 1.85 | $656.41 million | $2.22 | 7.69 |
| Himalaya Shipping | $123.58 million | 1.74 | $1.51 million | $0.48 | 11.22 |
Frontline has higher revenue and earnings than Himalaya Shipping. Frontline is trading at a lower price-to-earnings ratio than Himalaya Shipping, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Frontline and Himalaya Shipping’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Frontline | 25.64% | 19.25% | 7.19% |
| Himalaya Shipping | 17.03% | 13.36% | 2.49% |
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Frontline and Himalaya Shipping, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Frontline | 1 | 0 | 3 | 1 | 2.80 |
| Himalaya Shipping | 1 | 0 | 0 | 0 | 1.00 |
Frontline presently has a consensus target price of $20.62, indicating a potential upside of 20.75%. Given Frontline’s stronger consensus rating and higher probable upside, research analysts clearly believe Frontline is more favorable than Himalaya Shipping.
Risk & Volatility
Frontline has a beta of 0.24, meaning that its stock price is 76% less volatile than the S&P 500. Comparatively, Himalaya Shipping has a beta of 1.95, meaning that its stock price is 95% more volatile than the S&P 500.
Dividends
Frontline pays an annual dividend of $0.80 per share and has a dividend yield of 4.7%. Himalaya Shipping pays an annual dividend of $0.13 per share and has a dividend yield of 2.4%. Frontline pays out 36.0% of its earnings in the form of a dividend. Himalaya Shipping pays out 27.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Summary
Frontline beats Himalaya Shipping on 14 of the 17 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 Himalaya Shipping
Himalaya Shipping Ltd. provides dry bulk shipping services worldwide. The company operates a fleet of vessels. It serves major commodity trading, commodity and energy transition, and multi-modal transport companies. Himalaya Shipping Ltd. was incorporated in 2021 and is based in Hamilton, Bermuda.
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