Analyzing Teekay (TK) and Hoegh LNG Partners (HMLP)

Teekay (NYSE: TK) and Hoegh LNG Partners (NYSE:HMLP) are both small-cap energy companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, earnings, risk, institutional ownership, profitability and dividends.

Dividends

Teekay pays an annual dividend of $0.22 per share and has a dividend yield of 2.2%. Hoegh LNG Partners pays an annual dividend of $1.72 per share and has a dividend yield of 9.1%. Teekay pays out -13.5% of its earnings in the form of a dividend. Hoegh LNG Partners pays out 89.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Teekay has raised its dividend for 2 consecutive years and Hoegh LNG Partners has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Teekay and Hoegh LNG Partners, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teekay 1 2 0 0 1.67
Hoegh LNG Partners 0 0 3 0 3.00

Teekay currently has a consensus price target of $5.50, suggesting a potential downside of 43.99%. Hoegh LNG Partners has a consensus price target of $21.50, suggesting a potential upside of 13.46%. Given Hoegh LNG Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Hoegh LNG Partners is more favorable than Teekay.

Insider & Institutional Ownership

27.7% of Teekay shares are owned by institutional investors. Comparatively, 64.1% of Hoegh LNG Partners shares are owned by institutional investors. 2.4% of Teekay shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Teekay has a beta of 1.7, indicating that its share price is 70% more volatile than the S&P 500. Comparatively, Hoegh LNG Partners has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Profitability

This table compares Teekay and Hoegh LNG Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Teekay -6.66% -3.48% -1.12%
Hoegh LNG Partners 38.90% 7.77% 3.30%

Earnings and Valuation

This table compares Teekay and Hoegh LNG Partners’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Teekay $2.33 billion 0.36 -$123.18 million ($1.63) -6.02
Hoegh LNG Partners $91.11 million 4.11 $41.37 million $1.92 9.87

Hoegh LNG Partners has lower revenue, but higher earnings than Teekay. Teekay is trading at a lower price-to-earnings ratio than Hoegh LNG Partners, indicating that it is currently the more affordable of the two stocks.

Summary

Hoegh LNG Partners beats Teekay on 12 of the 16 factors compared between the two stocks.

About Teekay

Teekay Corporation (Teekay) is a provider of crude oil and gas marine transportation services. The Company also offers offshore oil production, storage and offloading services, primarily under long-term, fixed-rate contracts. The Company is engaged in the liquefied natural gas (LNG) and liquefied petroleum gas (LPG) shipping sectors, as well as in the operations in the offshore production, storage and transportation sector. It is also involved in the conventional tanker business. Teekay provides a set of marine services to the oil and gas companies. The Company has four lines of business: offshore logistics (shuttle tankers, the HiLoad DP unit, floating storage and off-take (FSO) units, units for maintenance and safety (UMS), and long-distance towing and offshore installation vessels), offshore production (floating production, storage and offloading (FPSO) units), liquefied gas carriers and conventional tankers.

About Hoegh LNG Partners

Hoegh LNG Partners LP owns, operates and acquires floating storage and regasification units (FSRUs), liquefied natural gas (LNG) carriers and other LNG infrastructure assets under long-term charters. The Company’s segments include Majority held FSRUs, Joint venture FSRUs and other. The Majority held FSRUs segment includes the direct financing lease related to the PT Perusahaan Gas Negara (Persero) Tbk (PGN) FSRU Lampung and the operating lease related to the Hoegh Gallant. The Joint venture FSRUs segment includes approximately two FSRUs, including the GDF Suez LNG Supply S.A. (GDF Suez) Neptune and the GDF Suez Cape Ann, which operate under long term time charters. The Company intends to acquire newbuilding FSRUs on long-term charters, rather than FSRUs based on retrofitted, first-generation LNG carriers. The PGN FSRU Lampung is located offshore in the Lampung province at the southeast coast of Sumatra, Indonesia.

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