Hornbeck Offshore Services (NYSE: HOS) and Scorpio Bulkers (NYSE:SALT) are both small-cap oils/energy companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, analyst recommendations, profitability, institutional ownership, dividends and valuation.

Profitability

This table compares Hornbeck Offshore Services and Scorpio Bulkers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hornbeck Offshore Services -47.42% -6.72% -3.29%
Scorpio Bulkers -72.87% -7.52% -4.58%

Analyst Ratings

This is a breakdown of recent ratings and price targets for Hornbeck Offshore Services and Scorpio Bulkers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hornbeck Offshore Services 0 4 0 0 2.00
Scorpio Bulkers 0 2 4 0 2.67

Hornbeck Offshore Services presently has a consensus target price of $4.75, indicating a potential upside of 69.64%. Scorpio Bulkers has a consensus target price of $9.54, indicating a potential upside of 13.59%. Given Hornbeck Offshore Services’ higher probable upside, equities research analysts plainly believe Hornbeck Offshore Services is more favorable than Scorpio Bulkers.

Institutional and Insider Ownership

86.7% of Hornbeck Offshore Services shares are held by institutional investors. Comparatively, 44.0% of Scorpio Bulkers shares are held by institutional investors. 7.1% of Hornbeck Offshore Services shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk & Volatility

Hornbeck Offshore Services has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500. Comparatively, Scorpio Bulkers has a beta of 3.68, meaning that its share price is 268% more volatile than the S&P 500.

Earnings and Valuation

This table compares Hornbeck Offshore Services and Scorpio Bulkers’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hornbeck Offshore Services $175.31 million 0.59 $13.13 million ($2.27) -1.23
Scorpio Bulkers $123.25 million 4.89 $610,000.00 ($1.26) -6.67

Hornbeck Offshore Services has higher revenue and earnings than Scorpio Bulkers. Scorpio Bulkers is trading at a lower price-to-earnings ratio than Hornbeck Offshore Services, indicating that it is currently the more affordable of the two stocks.

Summary

Hornbeck Offshore Services beats Scorpio Bulkers on 8 of the 13 factors compared between the two stocks.

About Hornbeck Offshore Services

Hornbeck Offshore Services Inc. provides marine transportation, subsea installation and accommodation support services to exploration and production, oilfield service, offshore construction and the United States military customers. The Company focuses on providing marine solutions for the deepwater and ultradeepwater energy industry in domestic and select foreign locations. The Company, through its subsidiaries, operates offshore supply vessels (OSVs), multi-purpose support vessels (MPSVs), and a shore-base facility to provide logistics support and specialty services to the offshore oil and gas exploration and production industry, primarily in the United States, Gulf of Mexico, Latin America and selected international markets. Its OSVs and MPSVs support the deep-well, deepwater and ultra-deepwater activities of the offshore oil and gas industry. It provides vessel management services for other vessel owners, such as crewing, daily operational management and maintenance activities.

About Scorpio Bulkers

Scorpio Bulkers Inc. is a shipping company. The Company owns and operates newbuilding drybulk carriers with fuel-efficient specifications and carrying capacities of greater than 30,000 deadweight tons (dwt). The Company operates through two segments: Kamsarmax and Ultramax. Its Kamsarmax segment includes vessels ranging from approximately 77,500 DWT to 98,700 DWT. Its Ultramax segment includes vessels ranging from approximately 60,200 DWT to 64,000 DWT. All of its owned vessels have carrying capacities of greater than 60,000 dwt. Its vessels transport a range of bulk commodities, including ores, coal, grains and fertilizers, along shipping routes, and are employed primarily in the spot market or in spot market-oriented pools of similarly sized vessels. As of December 31, 2016, its operating fleet of 48 vessels consisted of 47 drybulk vessels and one chartered-in drybulk vessel. It also has a contract for the construction of one newbuilding drybulk vessel.

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