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

Volatility & Risk

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

Dividends

Tsakos Energy Navigation pays an annual dividend of $0.20 per share and has a dividend yield of 4.9%. Danaos Corporation does not pay a dividend. Tsakos Energy Navigation pays out 100.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Recommendations

This is a summary of current recommendations for Tsakos Energy Navigation and Danaos Corporation, as provided by MarketBeat.com.

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

Tsakos Energy Navigation presently has a consensus price target of $5.75, indicating a potential upside of 41.63%. Danaos Corporation has a consensus price target of $3.00, indicating a potential upside of 81.82%. Given Danaos Corporation’s higher possible upside, analysts plainly believe Danaos Corporation is more favorable than Tsakos Energy Navigation.

Profitability

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

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

Institutional and Insider Ownership

26.5% of Tsakos Energy Navigation shares are owned by institutional investors. Comparatively, 1.9% of Danaos Corporation shares are owned by institutional investors. 1.0% of Tsakos Energy Navigation shares are owned 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.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Tsakos Energy Navigation $481.79 million 0.72 $55.78 million $0.20 20.30
Danaos Corporation $498.33 million 0.36 -$366.19 million ($3.52) -0.47

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.

Summary

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

About Tsakos Energy Navigation

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.

About Danaos Corporation

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.

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