Scorpio Tankers (NASDAQ: STNG) and DHT Holdings (NYSE:DHT) are both small-cap energy companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, profitability, risk, institutional ownership and analyst recommendations.

Institutional and Insider Ownership

33.9% of DHT Holdings shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

DHT Holdings pays an annual dividend of $0.08 per share and has a dividend yield of 2.1%. Scorpio Tankers does not pay a dividend. DHT Holdings pays out -18.2% of its earnings in the form of a dividend. Scorpio Tankers has increased its dividend for 2 consecutive years.

Profitability

This table compares Scorpio Tankers and DHT Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Scorpio Tankers -9.39% -3.53% -1.41%
DHT Holdings -12.48% 6.07% 3.03%

Earnings and Valuation

This table compares Scorpio Tankers and DHT Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Scorpio Tankers $480.42 million 1.19 $144.97 million N/A N/A
DHT Holdings $328.15 million 1.68 $154.80 million ($0.44) -8.80

DHT Holdings has higher revenue, but lower earnings than Scorpio Tankers.

Analyst Ratings

This is a breakdown of current ratings and price targets for Scorpio Tankers and DHT Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Scorpio Tankers 0 1 10 0 2.91
DHT Holdings 0 2 3 0 2.60

Scorpio Tankers presently has a consensus target price of $6.44, indicating a potential upside of 84.13%. DHT Holdings has a consensus target price of $6.00, indicating a potential upside of 55.04%. Given Scorpio Tankers’ stronger consensus rating and higher probable upside, analysts clearly believe Scorpio Tankers is more favorable than DHT Holdings.

Summary

DHT Holdings beats Scorpio Tankers on 7 of the 13 factors compared between the two stocks.

About Scorpio Tankers

Scorpio Tankers Inc. (Scorpio Tankers) is engaged in the seaborne transportation of refined petroleum products in the international shipping markets. The Company operates through four segments: Handymax, MR, LR1/Panamax and LR2. As of March 15, 2017, the Company’s fleet consisted of 78 owned tankers (22 LR2, 14 Handymax and 42 MR) with a weighted average age of approximately 2.3 years, and 19 time or bareboat chartered-in tankers, which it operated (one LR2, one LR1, eight MR and nine Handymax) (collectively referred to as its Operating Fleet). As of March 1, 2017, the Company’s total oil tanker fleet (crude, products and product/chemical tankers) consisted of 4,754 ships with a combined capacity of 525.9 million deadweight tonnage. As of December 31, 2016, the Company also had contracts for the construction of one LR2 tanker and eight MR tankers. Its vessels include STI Brixton, STI Comandante, STI Finchley, STI Hammersmith, STI Larvotto, STI San Antonio and STI Regina.

About DHT Holdings

DHT Holdings, Inc. operates a fleet of crude oil tankers. As of March 21, 2017, the Company’s fleet consisted of 21 crude oil tankers in operation. As of March 21, 2017, the Company’s fleet consisted of 19 very large crude carriers (VLCCs), which are tankers ranging in size from 200,000 to 320,000 deadweight tons (dwt), and two Aframax tankers (Aframaxes), which are tankers ranging in size from 80,000 to 120,000 dwt. As of December 31, 2016, the Company’s fleet in operation had a combined carrying capacity of 6,087,095 dwt. As of March 21, 2017, the Company’s VLCCs included DHT Ann, DHT Eagle, DHT Phoenix, DHT Hawk, DHT Condor, DHT Scandinavia, DHT China, DHT Amazon, DHT Redwood, DHT Sundarbans, DHT Taiga, DHT Leopard, DHT Lion, DHT Panther and DHT Puma. As of March 21, 2017, the Company’s Aframaxes are DHT Cathy and DHT Sophie.

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