Teekay Offshore Partners (NYSE: TOO) and Golden Ocean Group (NASDAQ:GOGL) are both small-cap transportation companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.
Volatility and Risk
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Teekay Offshore Partners has a beta of 2.51, suggesting that its share price is 151% more volatile than the S&P 500. Comparatively, Golden Ocean Group has a beta of 1.98, suggesting that its share price is 98% more volatile than the S&P 500.
Earnings & Valuation
This table compares Teekay Offshore Partners and Golden Ocean Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Teekay Offshore Partners||$1.11 billion||1.02||-$303.20 million||$0.01||277.00|
|Golden Ocean Group||$460.02 million||2.64||-$2.34 million||($0.02)||-421.50|
Golden Ocean Group has lower revenue, but higher earnings than Teekay Offshore Partners. Golden Ocean Group is trading at a lower price-to-earnings ratio than Teekay Offshore Partners, indicating that it is currently the more affordable of the two stocks.
Teekay Offshore Partners pays an annual dividend of $0.04 per share and has a dividend yield of 1.4%. Golden Ocean Group pays an annual dividend of $0.40 per share and has a dividend yield of 4.7%. Teekay Offshore Partners pays out 400.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Golden Ocean Group pays out -2,000.0% of its earnings in the form of a dividend. Golden Ocean Group is clearly the better dividend stock, given its higher yield and lower payout ratio.
Institutional & Insider Ownership
76.2% of Teekay Offshore Partners shares are held by institutional investors. Comparatively, 25.0% of Golden Ocean Group shares are held by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares Teekay Offshore Partners and Golden Ocean Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Teekay Offshore Partners||-26.78%||3.41%||0.68%|
|Golden Ocean Group||-0.51%||-0.17%||-0.09%|
This is a breakdown of current ratings and recommmendations for Teekay Offshore Partners and Golden Ocean Group, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Teekay Offshore Partners||0||2||3||0||2.60|
|Golden Ocean Group||0||1||5||0||2.83|
Teekay Offshore Partners currently has a consensus price target of $3.25, indicating a potential upside of 17.33%. Golden Ocean Group has a consensus price target of $10.33, indicating a potential upside of 22.58%. Given Golden Ocean Group’s stronger consensus rating and higher probable upside, analysts plainly believe Golden Ocean Group is more favorable than Teekay Offshore Partners.
Golden Ocean Group beats Teekay Offshore Partners on 8 of the 15 factors compared between the two stocks.
About Teekay Offshore Partners
Teekay Offshore Partners L.P. provides marine transportation, oil production, storage, long-distance towing and offshore installation, and maintenance and safety services for the oil industry. It operates in six segments: Floating Production, Storage and Offloading (FPSO); Shuttle Tanker; Floating Storage and Off-Take (FSO); Unit for Maintenance and Safety (UMS); Towage; and Conventional Tanker. The company serves customers in offshore oil regions of the North Sea, Brazil, and the East Coast of Canada. As at December 31, 2017, it had a fleet of 37 shuttle tankers, 3 chartered-in vessels, 1 HiLoad dynamic positioning unit, 8 FPSO units, 6 FSO units, 10 long-distance towing and offshore installation vessels, 1 UMS, and 2 chartered-in conventional oil tankers. Teekay Offshore GP L.L.C. serves as the general partner of Teekay Offshore Partners L.P. The company was founded in 2006 and is based in Hamilton, Bermuda. Teekay Offshore Partners L.P. is a subsidiary of Brookfield TK TOLP L.P.
About Golden Ocean Group
Golden Ocean Group Limited, a shipping company, engages in the transportation of bulk commodities worldwide. It owns and operates a fleet of dry bulk vessels, including Newcastlemax, Capesize, Panamax, and Ultramax vessels in the spot and time charter markets. The company transports bulk commodities, such as ores, coal, grains, and fertilizers. As of March 20, 2018, it owned 68 dry bulk vessels, as well as had 10 chartered-in vessels. The company is based in Hamilton, Bermuda.