Head-To-Head Comparison: Danaos (NYSE:DAC) and BW LPG (NYSE:BWLP)

Danaos (NYSE:DAC) and BW LPG (NYSE:BWLP) are both small-cap transportation companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for Danaos and BW LPG, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Danaos	0	0	2	0	3.00
BW LPG	0	1	1	0	2.50

Danaos presently has a consensus target price of $105.00, indicating a potential upside of 7.36%. Given Danaos’ stronger consensus rating and higher probable upside, equities analysts clearly believe Danaos is more favorable than BW LPG.

Earnings & Valuation

This table compares Danaos and BW LPG”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Danaos	$1.03 billion	1.80	$505.07 million	$25.06	3.90
BW LPG	$3.56 billion	0.47	$354.30 million	$1.54	8.24

Danaos has higher earnings, but lower revenue than BW LPG. Danaos is trading at a lower price-to-earnings ratio than BW LPG, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Danaos and BW LPG’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Danaos	44.62%	13.88%	10.99%
BW LPG	6.09%	11.70%	6.88%

Institutional & Insider Ownership

19.0% of Danaos shares are held by institutional investors. 41.0% of Danaos shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Dividends

Danaos pays an annual dividend of $3.60 per share and has a dividend yield of 3.7%. BW LPG pays an annual dividend of $0.88 per share and has a dividend yield of 6.9%. Danaos pays out 14.4% of its earnings in the form of a dividend. BW LPG pays out 57.1% 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. Danaos has increased its dividend for 3 consecutive years.

Summary

Danaos beats BW LPG on 13 of the 16 factors compared between the two stocks.

About Danaos

Danaos Corporation, together with its subsidiaries, provides container and drybulk vessels services in Australia, Asia, and Europe. The company offers seaborne transportation services by operating vessels in the containership and drybulk sectors of the shipping industry. As of April 03, 2024, it had a fleet of 68 containerships aggregating 421,293 twenty-foot equivalent units in capacity. The company was formerly known as Danaos Holdings Limited and changed its name to Danaos Corporation in October 2005. Danaos Corporation was founded in 1963 and is based in Piraeus, Greece.

About BW LPG

BW LPG Limited, an investment holding company, engages in ship owning and chartering activities worldwide. The company operates through Shipping and Product Services segments. The company involved in the transportation of liquefied petroleum gas to oil companies, and trading and utility companies. It also offers integrated liquified petroleum gas (LPG) delivery services and support; wholesale and trade of LPG; and management services. It owns and operates LPG vessels and a fleet of very large gas carriers. The company was formerly known as BW Gas LPG Holding Limited and changed its name to BW LPG Limited in September 2013. BW LPG Limited was founded in 1935 and is headquartered in Singapore.