Seaspan Corporation (NYSE: SSW) and Hornbeck Offshore Services (NYSE:HOS) are both small-cap transportation companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Seaspan Corporation and Hornbeck Offshore Services, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Seaspan Corporation 3 5 0 0 1.63
Hornbeck Offshore Services 0 4 0 0 2.00

Seaspan Corporation presently has a consensus price target of $6.79, indicating a potential downside of 4.29%. Hornbeck Offshore Services has a consensus price target of $4.75, indicating a potential upside of 17.57%. Given Hornbeck Offshore Services’ stronger consensus rating and higher probable upside, analysts clearly believe Hornbeck Offshore Services is more favorable than Seaspan Corporation.

Dividends

Seaspan Corporation pays an annual dividend of $0.50 per share and has a dividend yield of 7.1%. Hornbeck Offshore Services does not pay a dividend. Seaspan Corporation pays out -29.9% of its earnings in the form of a dividend. Hornbeck Offshore Services has increased its dividend for 5 consecutive years.

Insider and Institutional Ownership

15.3% of Seaspan Corporation shares are held by institutional investors. Comparatively, 86.7% of Hornbeck Offshore Services shares are held by institutional investors. 7.1% of Hornbeck Offshore Services shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Seaspan Corporation and Hornbeck Offshore Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Seaspan Corporation $844.00 million 0.99 $501.00 million ($1.67) -4.25
Hornbeck Offshore Services $175.31 million 0.85 $13.13 million ($2.27) -1.78

Seaspan Corporation has higher revenue and earnings than Hornbeck Offshore Services. Seaspan Corporation 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.

Risk and Volatility

Seaspan Corporation has a beta of 0.65, suggesting that its share price is 35% less volatile than the S&P 500. Comparatively, Hornbeck Offshore Services has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Seaspan Corporation -13.54% 7.51% 2.36%
Hornbeck Offshore Services -47.42% -6.72% -3.29%

Summary

Seaspan Corporation beats Hornbeck Offshore Services on 9 of the 15 factors compared between the two stocks.

Seaspan Corporation Company Profile

Seaspan Corporation is an independent charter owner and manager of containerships. The Company charters pursuant to long-term, fixed-rate time charters with various container liner companies. As of February 20, 2017, it had operated a fleet of 88 containerships and had entered into contracts for the purchase of an additional eight new building containerships. Its operating vessels include YM Wish, YM Wellhead, YM Witness, COSCO Glory, COSCO Development, COSCO Harmony, COSCO Excellence, COSCO Hope, COSCO Fortune, Seaspan Yangtze, CSCL Zeebrugge, CSCL Long Beach, CSCL Oceania, COSCO Vietnam, MOL Emissary, Seaspan Chiwan, Seaspan Ningbo, Seaspan Felixstowe, CSCL Brisbane, Seaspan Santos, Seaspan Loncomilla, Seaspan Lingue, CSCL Montevideo, CSCL Callao, Guayaquil Bridge and Calicanto Bridge. The Company is engaged in the operation and management of vessel, including maintaining the vessel, periodic dry-docking, cleaning and painting and performing work required by regulations.

Hornbeck Offshore Services Company Profile

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.

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