Contrasting BW LPG (NYSE:BWLP) & Torm (NASDAQ:TRMD)

BW LPG (NYSE:BWLP) and Torm (NASDAQ:TRMD) are both mid-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, risk, institutional ownership, earnings, dividends and analyst recommendations.

Institutional & Insider Ownership

73.9% of Torm shares are owned by institutional investors. 0.4% of Torm shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares BW LPG and Torm”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BW LPG	$3.58 billion	0.72	$354.30 million	$1.60	10.64
Torm	$1.34 billion	1.98	$285.30 million	$2.84	9.94

BW LPG has higher revenue and earnings than Torm. Torm is trading at a lower price-to-earnings ratio than BW LPG, indicating that it is currently the more affordable of the two stocks.

Dividends

BW LPG pays an annual dividend of $1.60 per share and has a dividend yield of 9.4%. Torm pays an annual dividend of $1.81 per share and has a dividend yield of 6.4%. BW LPG 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. Torm pays out 63.7% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current ratings and target prices for BW LPG and Torm, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BW LPG	0	1	1	0	2.50
Torm	1	2	1	1	2.40

Torm has a consensus target price of $34.00, suggesting a potential upside of 20.40%. Given Torm’s higher probable upside, analysts clearly believe Torm is more favorable than BW LPG.

Profitability

This table compares BW LPG and Torm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BW LPG	6.76%	12.61%	7.32%
Torm	21.29%	13.26%	8.48%

Summary

Torm beats BW LPG on 10 of the 15 factors compared between the two stocks.

About BW LPG

BW LPG Limited, an investment holding company, engages in ship owning and chartering activities worldwide. The company operates through Shipping and Product Services segments. The company involved in the transportation of liquefied petroleum gas to oil companies, and trading and utility companies. It also offers integrated liquified petroleum gas (LPG) delivery services and support; wholesale and trade of LPG; and management services. It owns and operates LPG vessels and a fleet of very large gas carriers. The company was formerly known as BW Gas LPG Holding Limited and changed its name to BW LPG Limited in September 2013. BW LPG Limited was founded in 1935 and is headquartered in Singapore.

About Torm

TORM plc, a shipping company, owns and operates a fleet of product tankers in the United Kingdom. It operates in two operating segments, Tanker and Marine Exhaust. The Tanker segment transports refined oil products, such as gasoline, jet fuel, kerosene, naphtha, and gas oil, as well as dirty petroleum products, including fuel oil. The Marine Exhaust segment engages in developing and producing advanced and green marine equipment. TORM plc was founded in 1889 and is based in London, the United Kingdom.