Reviewing Navigator (NYSE:NVGS) & KNOT Offshore Partners (NYSE:KNOP)

Navigator (NYSE:NVGS) and KNOT Offshore Partners (NYSE:KNOP) are both small-cap transportation companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, analyst recommendations, profitability, valuation, dividends and institutional ownership.

Profitability

This table compares Navigator and KNOT Offshore Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Navigator	17.06%	6.35%	3.47%
KNOT Offshore Partners	6.38%	7.30%	2.35%

Earnings and Valuation

This table compares Navigator and KNOT Offshore Partners”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Navigator	$586.96 million	2.19	$100.12 million	$1.48	13.34
KNOT Offshore Partners	$364.44 million	0.95	$23.26 million	$0.68	14.96

Navigator has higher revenue and earnings than KNOT Offshore Partners. Navigator is trading at a lower price-to-earnings ratio than KNOT Offshore Partners, indicating that it is currently the more affordable of the two stocks.

Dividends

Navigator pays an annual dividend of $0.28 per share and has a dividend yield of 1.4%. KNOT Offshore Partners pays an annual dividend of $0.10 per share and has a dividend yield of 1.0%. Navigator pays out 18.9% of its earnings in the form of a dividend. KNOT Offshore Partners pays out 14.7% 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. Navigator has raised its dividend for 1 consecutive years. Navigator is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Navigator has a beta of 0.45, meaning that its stock price is 55% less volatile than the S&P 500. Comparatively, KNOT Offshore Partners has a beta of -0.1, meaning that its stock price is 110% less volatile than the S&P 500.

Institutional & Insider Ownership

19.0% of Navigator shares are owned by institutional investors. Comparatively, 26.8% of KNOT Offshore Partners shares are owned by institutional investors. 0.4% of Navigator shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings for Navigator and KNOT Offshore Partners, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Navigator	0	1	4	0	2.80
KNOT Offshore Partners	0	3	1	1	2.60

Navigator currently has a consensus price target of $21.50, suggesting a potential upside of 8.94%. KNOT Offshore Partners has a consensus price target of $14.00, suggesting a potential upside of 37.59%. Given KNOT Offshore Partners’ higher probable upside, analysts clearly believe KNOT Offshore Partners is more favorable than Navigator.

Summary

Navigator beats KNOT Offshore Partners on 12 of the 18 factors compared between the two stocks.

About Navigator

Navigator Holdings Ltd. engages in owning and operating a fleet of liquefied gas carriers worldwide. It provides international and regional seaborne transportation services of petrochemical gases, liquefied petroleum gases, and ammonia for energy companies, industrial users, and commodity traders. The company also offers ship shore infrastructure and consultancy services. It operates a fleet of 56 semi- or fully-refrigerated liquefied gas carriers. The company was formerly known as Isle of Man public limited company and changed its name to Navigator Holdings Ltd. in 2006. Navigator Holdings Ltd. was incorporated in 1997 and is based in London, the United Kingdom.

About KNOT Offshore Partners

KNOT Offshore Partners LP acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, and discharge of crude oil under time charters and bareboat charters. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.