Nordic American Tankers (NYSE:NAT) vs. Torm (NASDAQ:TRMD) Head to Head Review

Nordic American Tankers (NYSE:NAT) and Torm (NASDAQ:TRMD) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, dividends, risk and earnings.

Analyst Recommendations

This is a breakdown of current recommendations for Nordic American Tankers and Torm, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordic American Tankers	1	2	1	0	2.00
Torm	0	1	2	1	3.00

Nordic American Tankers presently has a consensus price target of $6.00, suggesting a potential downside of 29.13%. Torm has a consensus price target of $38.00, suggesting a potential downside of 4.86%. Given Torm’s stronger consensus rating and higher probable upside, analysts plainly believe Torm is more favorable than Nordic American Tankers.

Profitability

This table compares Nordic American Tankers and Torm’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nordic American Tankers	47.04%	20.58%	10.38%
Torm	35.51%	27.24%	17.96%

Valuation & Earnings

This table compares Nordic American Tankers and Torm”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordic American Tankers	$182.54 million	9.82	$12.27 million	$0.59	14.35
Torm	$1.76 billion	2.32	$285.30 million	$6.07	6.58

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

Dividends

Nordic American Tankers pays an annual dividend of $1.08 per share and has a dividend yield of 12.8%. Torm pays an annual dividend of $7.00 per share and has a dividend yield of 17.5%. Nordic American Tankers pays out 183.1% 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 115.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Nordic American Tankers has raised its dividend for 1 consecutive years. Torm is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Nordic American Tankers has a beta of -0.56, suggesting that its stock price is 156% less volatile than the S&P 500. Comparatively, Torm has a beta of 0.07, suggesting that its stock price is 93% less volatile than the S&P 500.

Institutional and Insider Ownership

44.3% of Nordic American Tankers shares are held by institutional investors. Comparatively, 73.9% of Torm shares are held by institutional investors. 2.9% of Nordic American Tankers shares are held by company insiders. Comparatively, 0.4% of Torm shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Torm beats Nordic American Tankers on 13 of the 18 factors compared between the two stocks.

About Nordic American Tankers

Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 20 Suezmax crude oil tankers. The company was incorporated in 1995 and is headquartered in Hamilton, Bermuda.

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.