Matson (NYSE:MATX) vs. Global Ship Lease (NYSE:GSL) Critical Review

Global Ship Lease (NYSE:GSL) and Matson (NYSE:MATX) are both industrials companies, but which is the better business? We will compare the two companies based on the strength of their profitability, earnings, valuation, institutional ownership, dividends, analyst recommendations and risk.

Risk & Volatility

Global Ship Lease has a beta of 0.98, indicating that its stock price is 2% less volatile than the S&P 500. Comparatively, Matson has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Profitability

This table compares Global Ship Lease and Matson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Global Ship Lease	49.10%	19.92%	12.81%
Matson	13.41%	16.94%	10.01%

Analyst Recommendations

This is a breakdown of current ratings and target prices for Global Ship Lease and Matson, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Global Ship Lease	0	1	3	1	3.00
Matson	0	1	5	0	2.83

Global Ship Lease presently has a consensus target price of $51.00, indicating a potential upside of 21.49%. Matson has a consensus target price of $249.25, indicating a potential upside of 8.86%. Given Global Ship Lease’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Global Ship Lease is more favorable than Matson.

Dividends

Global Ship Lease pays an annual dividend of $2.50 per share and has a dividend yield of 6.0%. Matson pays an annual dividend of $1.52 per share and has a dividend yield of 0.7%. Global Ship Lease pays out 24.0% of its earnings in the form of a dividend. Matson pays out 10.2% 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. Global Ship Lease has increased its dividend for 2 consecutive years and Matson has increased its dividend for 13 consecutive years.

Valuation and Earnings

This table compares Global Ship Lease and Matson”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Global Ship Lease	$766.45 million	1.97	$416.45 million	$10.40	4.04
Matson	$3.46 billion	1.98	$444.80 million	$14.96	15.30

Matson has higher revenue and earnings than Global Ship Lease. Global Ship Lease is trading at a lower price-to-earnings ratio than Matson, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

50.1% of Global Ship Lease shares are owned by institutional investors. Comparatively, 84.8% of Matson shares are owned by institutional investors. 2.5% of Matson shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Matson beats Global Ship Lease on 11 of the 18 factors compared between the two stocks.

About Global Ship Lease

Global Ship Lease, Inc., together with its subsidiaries, engages in owning and chartering of containerships under fixed-rate charters to container shipping companies worldwide. As of March 11, 2024, it owned 68 mid-sized and smaller containerships, ranging from 2,207 to 11,040 twenty-foot equivalent unit (TEU), with an aggregate capacity of 375,406 TEU. The company was founded in 2007 and is based in Athens, Greece.

About Matson

Matson, Inc., together with its subsidiaries, engages in the provision of ocean transportation and logistics services. It operates through two segments, Ocean Transportation and Logistics. The Ocean Transportation segment offers ocean freight transportation services to the domestic non-contiguous economies of Hawaii, Japan, Alaska, and Guam, as well as to other island economies in Micronesia. It primarily transports dry containers of mixed commodities, refrigerated commodities, food products, beverages, building materials, automobiles, and household goods; livestock; seafood; general sustenance cargo; and garments, footwear, e-commerce, and other retail merchandise. This segment also operates an expedited service from China to Long Beach, California, and various islands in the South Pacific, as well as Okinawa, Japan; and provides stevedoring, refrigerated cargo services, inland transportation, container equipment maintenance, and other terminal services to ocean carriers on the Hawaiian islands of Oahu, Hawaii, Maui, and Kauai, as well as in the Alaska locations of Anchorage, Kodiak, and Dutch Harbor. In addition, it offers vessel management and container transshipment services. The Logistics segment provides multimodal transportation brokerage services, including domestic and international rail intermodal, long-haul and regional highway trucking, specialized hauling, flat-bed and project, less-than-truckload, and expedited freight services; less-than-container load consolidation and freight forwarding services; warehousing and distribution services; supply chain management services, and non-vessel operating common carrier freight forwarding services. It serves the U.S. military, freight forwarders, retailers, consumer goods, automobile manufacturers, and other customers. The company was formerly known as Alexander & Baldwin Holdings, Inc. and changed its name to Matson, Inc. in June 2012. Matson, Inc. was founded in 1882 and is headquartered in Honolulu, Hawaii.