Financial Contrast: SFL (NYSE:SFL) & DT Midstream (NYSE:DTM)

DT Midstream (NYSE:DTM) and SFL (NYSE:SFL) are both energy companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, valuation, dividends and analyst recommendations.

Analyst Ratings

This is a breakdown of recent ratings and price targets for DT Midstream and SFL, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DT Midstream	1	4	10	0	2.60
SFL	0	1	2	0	2.67

DT Midstream currently has a consensus target price of $152.86, indicating a potential upside of 22.26%. SFL has a consensus target price of $14.00, indicating a potential upside of 5.51%. Given DT Midstream’s higher probable upside, equities research analysts clearly believe DT Midstream is more favorable than SFL.

Dividends

DT Midstream pays an annual dividend of $3.52 per share and has a dividend yield of 2.8%. SFL pays an annual dividend of $0.88 per share and has a dividend yield of 6.6%. DT Midstream pays out 77.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. SFL pays out 183.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. DT Midstream has raised its dividend for 2 consecutive years and SFL has raised its dividend for 1 consecutive years.

Profitability

This table compares DT Midstream and SFL’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DT Midstream	35.72%	9.58%	4.62%
SFL	8.76%	3.41%	0.92%

Volatility and Risk

DT Midstream has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, SFL has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.

Earnings and Valuation

This table compares DT Midstream and SFL”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DT Midstream	$1.24 billion	10.26	$441.00 million	$4.57	27.36
SFL	$733.04 million	2.62	-$26.43 million	$0.48	27.64

DT Midstream has higher revenue and earnings than SFL. DT Midstream is trading at a lower price-to-earnings ratio than SFL, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

81.5% of DT Midstream shares are held by institutional investors. Comparatively, 28.6% of SFL shares are held by institutional investors. 0.5% of DT Midstream shares are held 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.

Summary

DT Midstream beats SFL on 14 of the 17 factors compared between the two stocks.

About DT Midstream

DT Midstream, Inc., together with its subsidiaries, provides integrated natural gas services in the United States. The company operates through two segments, Pipeline and Gathering. The Pipeline segment owns and operates interstate and intrastate natural gas pipelines, storage systems, and natural gas gathering lateral pipelines. This segment also engages in the transportation and storage of natural gas for intermediate and end-user customers. The Gathering segment owns and operates gas gathering systems. This segment is involved in the collection of natural gas for delivery to plants for treating, to gathering pipelines for further gathering, or to pipelines for transportation; and provision of associated ancillary services, including compression, dehydration, gas treatment, water impoundment, water transportation, water disposal, and sand mining. It serves natural gas producers, local distribution companies, electric power generators, industrials, and national marketers. The company was incorporated in 2021 and is headquartered in Detroit, Michigan.

About SFL

SFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters. The company operates in various sectors of the maritime, and shipping and offshore industries, including oil transportation, dry bulk shipments, chemical transportation, oil products transportation, container transportation, car transportation, and drilling rigs. As of December 31, 2023, the company owned seven crude oil carriers, six oil product tankers, 15 dry bulk carriers, 32 container vessels, one jack-up drilling rig, one ultra-deepwater drilling rig, and five car carriers. It primarily operates in Bermuda, Canada, Cyprus, Liberia, Namibia, Norway, Singapore, the United Kingdom, and the Marshall Islands. The company was formerly known as Ship Finance International Limited and changed its name to SFL Corporation Ltd. in September 2019. SFL Corporation Ltd. was founded in 2003 and is based in Hamilton, Bermuda.