Analyzing Flex LNG (NYSE:FLNG) and Ardmore Shipping (NYSE:ASC)

Flex LNG (NYSE:FLNG) and Ardmore Shipping (NYSE:ASC) 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, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Risk & Volatility

Flex LNG has a beta of 0.2, meaning that its share price is 80% less volatile than the S&P 500. Comparatively, Ardmore Shipping has a beta of 0.03, meaning that its share price is 97% less volatile than the S&P 500.

Profitability

This table compares Flex LNG and Ardmore Shipping’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Flex LNG	22.26%	12.15%	3.37%
Ardmore Shipping	18.00%	9.63%	7.92%

Valuation and Earnings

This table compares Flex LNG and Ardmore Shipping”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Flex LNG	$347.64 million	4.96	$74.82 million	$1.40	22.78
Ardmore Shipping	$310.20 million	2.47	$41.01 million	$1.33	14.16

Flex LNG has higher revenue and earnings than Ardmore Shipping. Ardmore Shipping is trading at a lower price-to-earnings ratio than Flex LNG, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Flex LNG and Ardmore Shipping, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Flex LNG	2	2	0	0	1.50
Ardmore Shipping	0	2	2	0	2.50

Flex LNG currently has a consensus target price of $24.00, suggesting a potential downside of 24.74%. Ardmore Shipping has a consensus target price of $17.00, suggesting a potential downside of 9.71%. Given Ardmore Shipping’s stronger consensus rating and higher probable upside, analysts clearly believe Ardmore Shipping is more favorable than Flex LNG.

Insider & Institutional Ownership

62.2% of Ardmore Shipping shares are held by institutional investors. 0.3% of Flex LNG shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Dividends

Flex LNG pays an annual dividend of $3.00 per share and has a dividend yield of 9.4%. Ardmore Shipping pays an annual dividend of $0.36 per share and has a dividend yield of 1.9%. Flex LNG pays out 214.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Ardmore Shipping pays out 27.1% of its earnings in the form of a dividend.

Summary

Flex LNG beats Ardmore Shipping on 10 of the 16 factors compared between the two stocks.

About Flex LNG

FLEX LNG Ltd. engages in the seaborne transportation of liquefied natural gas (LPG) through the ownership and operation of LNG carriers. The company was founded by Philip Eystein Fjeld, Trym Tveitnes and Jostein Ueland in September 2006 and is headquartered in Hamilton, Bermuda.

About Ardmore Shipping

Ardmore Shipping Corporation engages in the seaborne transportation of petroleum products and chemicals worldwide. The company's fleet consists of 22 owned vessels including 21 Eco-design and 1 Eco-mod vessel, and four chartered-in vessels. It serves oil majors, oil companies, oil and chemical traders, chemical companies, and pooling service providers. Ardmore Shipping Corporation was founded in 2010 and is headquartered in Pembroke, Bermuda.