Frontline (NYSE:FRO – Get Free Report) and Himalaya Shipping (NYSE:HSHP – Get Free Report) are both transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.
Risk & Volatility
Frontline has a beta of 0.24, meaning that its share price is 76% less volatile than the S&P 500. Comparatively, Himalaya Shipping has a beta of 1.95, meaning that its share price is 95% more volatile than the S&P 500.
Valuation & Earnings
This table compares Frontline and Himalaya Shipping”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Frontline | $2.05 billion | 1.86 | $656.41 million | $2.22 | 7.73 |
| Himalaya Shipping | $123.58 million | 1.75 | $1.51 million | $0.48 | 11.30 |
Frontline has higher revenue and earnings than Himalaya Shipping. Frontline is trading at a lower price-to-earnings ratio than Himalaya Shipping, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Frontline and Himalaya Shipping’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Frontline | 25.64% | 19.25% | 7.19% |
| Himalaya Shipping | 17.03% | 13.36% | 2.49% |
Dividends
Frontline pays an annual dividend of $0.80 per share and has a dividend yield of 4.7%. Himalaya Shipping pays an annual dividend of $0.13 per share and has a dividend yield of 2.4%. Frontline pays out 36.0% of its earnings in the form of a dividend. Himalaya Shipping pays out 27.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.
Institutional & Insider Ownership
22.7% of Frontline shares are held by institutional investors. Comparatively, 22.3% of Himalaya Shipping shares are held by institutional investors. 48.1% of Frontline shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent recommendations for Frontline and Himalaya Shipping, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Frontline | 1 | 0 | 3 | 1 | 2.80 |
| Himalaya Shipping | 1 | 0 | 0 | 0 | 1.00 |
Frontline currently has a consensus target price of $20.62, indicating a potential upside of 20.25%. Given Frontline’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Frontline is more favorable than Himalaya Shipping.
Summary
Frontline beats Himalaya Shipping on 14 of the 17 factors compared between the two stocks.
About Frontline
Frontline plc, a shipping company, engages in the seaborne transportation of crude oil and oil products worldwide. It owns and operates oil and product tankers. As of December 31, 2022, the company operated a fleet of 70 vessels. It is also involved in the charter, purchase, and sale of vessels. The company was founded in 1985 and is based in Limassol, Cyprus.
About Himalaya Shipping
Himalaya Shipping Ltd. provides dry bulk shipping services worldwide. The company operates a fleet of vessels. It serves major commodity trading, commodity and energy transition, and multi-modal transport companies. Himalaya Shipping Ltd. was incorporated in 2021 and is based in Hamilton, Bermuda.
Receive News & Ratings for Frontline Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Frontline and related companies with MarketBeat.com's FREE daily email newsletter.
