Critical Review: KNOT Offshore Partners (KNOP) & Hoegh LNG Partners (HMLP)

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

Earnings & Valuation

This table compares KNOT Offshore Partners and Hoegh LNG Partners’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
KNOT Offshore Partners $173.67 million 3.91 $59.84 million $2.39 8.68
Hoegh LNG Partners $91.11 million 4.04 $41.37 million $1.92 9.71

KNOT Offshore Partners has higher revenue and earnings than Hoegh LNG Partners. KNOT Offshore Partners 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.

Dividends

KNOT Offshore Partners pays an annual dividend of $2.08 per share and has a dividend yield of 10.0%. Hoegh LNG Partners pays an annual dividend of $1.72 per share and has a dividend yield of 9.2%. KNOT Offshore Partners pays out 87.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. 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. KNOT Offshore Partners has increased its dividend for 3 consecutive years. KNOT Offshore Partners is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

Net Margins Return on Equity Return on Assets
KNOT Offshore Partners 34.02% 11.18% 4.40%
Hoegh LNG Partners 38.90% 7.77% 3.30%

Risk and Volatility

KNOT Offshore Partners has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500. Comparatively, Hoegh LNG Partners has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Institutional and Insider Ownership

43.8% of KNOT Offshore Partners shares are owned by institutional investors. Comparatively, 64.1% of Hoegh LNG Partners shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for KNOT Offshore Partners and Hoegh LNG Partners, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
KNOT Offshore Partners 0 0 0 0 N/A
Hoegh LNG Partners 0 0 3 0 3.00

Hoegh LNG Partners has a consensus target price of $21.50, suggesting a potential upside of 15.28%. Given Hoegh LNG Partners’ higher probable upside, analysts plainly believe Hoegh LNG Partners is more favorable than KNOT Offshore Partners.

Summary

KNOT Offshore Partners beats Hoegh LNG Partners on 8 of the 15 factors compared between the two stocks.

About KNOT Offshore Partners

KNOT Offshore Partners LP (KNOT Offshore Partners or the Partnership), owns, operates and acquires shuttle tankers under long-term charters. The Partnership’s vessels in its fleet are chartered to Statoil ASA (Statoil), Petrobras Transporte S.A. (Transpetro), Repsol Sinopec Brasil, S.A. (Repsol), Royal Dutch Shell plc, ExxonMobil, and Eni Trading and Shipping S.p.A. (ENI). As of March 17, 2017, the Company had a fleet of 12 shuttle tankers. Its shuttle tankers include Fortaleza Knutsen, Recife Knutsen, Bodil Knutsen and Dan Cisne. KNOT Offshore Partners GP LLC is the general partner of the Partnership. It is engaged in the loading, transportation and storage of the crude oil using the vessels in its fleet. It provides all of these services under time charters and bareboat charters. As of December 31, 2016, eight of its shuttle tankers were chartered under time charters and four of its shuttle tankers were chartered under bareboat charters.

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.

Receive News & Ratings for KNOT Offshore Partners Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for KNOT Offshore Partners and related companies with MarketBeat.com's FREE daily email newsletter.

Latest News

Leave a Reply