Head to Head Analysis: A.P. Moller-Maersk (OTCMKTS:AMKBY) vs. KNOT Offshore Partners (NYSE:KNOP)

KNOT Offshore Partners (NYSE:KNOP) and A.P. Moller-Maersk (OTCMKTS:AMKBY) are both transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, analyst recommendations, valuation, profitability, earnings and risk.

Dividends

KNOT Offshore Partners pays an annual dividend of $0.30 per share and has a dividend yield of 2.9%. A.P. Moller-Maersk pays an annual dividend of $0.20 per share and has a dividend yield of 1.6%. KNOT Offshore Partners pays out 55.6% of its earnings in the form of a dividend. A.P. Moller-Maersk pays out 37.7% 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.

Analyst Ratings

This is a summary of current ratings and price targets for KNOT Offshore Partners and A.P. Moller-Maersk, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KNOT Offshore Partners	1	2	1	1	2.40
A.P. Moller-Maersk	6	6	0	1	1.69

KNOT Offshore Partners currently has a consensus target price of $14.00, suggesting a potential upside of 36.59%. Given KNOT Offshore Partners’ stronger consensus rating and higher probable upside, analysts clearly believe KNOT Offshore Partners is more favorable than A.P. Moller-Maersk.

Profitability

This table compares KNOT Offshore Partners and A.P. Moller-Maersk’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KNOT Offshore Partners	4.92%	6.36%	2.05%
A.P. Moller-Maersk	3.01%	3.17%	2.04%

Insider and Institutional Ownership

26.8% of KNOT Offshore Partners shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares KNOT Offshore Partners and A.P. Moller-Maersk”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KNOT Offshore Partners	$372.42 million	0.93	$22.96 million	$0.54	18.98
A.P. Moller-Maersk	$53.99 billion	0.76	$2.73 billion	$0.53	24.34

A.P. Moller-Maersk has higher revenue and earnings than KNOT Offshore Partners. KNOT Offshore Partners is trading at a lower price-to-earnings ratio than A.P. Moller-Maersk, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

KNOT Offshore Partners has a beta of -0.05, indicating that its share price is 105% less volatile than the S&P 500. Comparatively, A.P. Moller-Maersk has a beta of 0.71, indicating that its share price is 29% less volatile than the S&P 500.

Summary

KNOT Offshore Partners beats A.P. Moller-Maersk on 10 of the 15 factors compared between the two stocks.

About KNOT Offshore Partners

KNOT Offshore Partners LP acquires, owns, and operates shuttle tankers under long-term charters in the North Sea and Brazil. The company provides loading, transportation, and discharge of crude oil under time charters and bareboat charters. The company was founded in 2013 and is headquartered in Aberdeen, the United Kingdom.

About A.P. Moller-Maersk

A.P. Møller – Mærsk A/S, together with its subsidiaries, engages in the ocean transport and logistics business in Denmark and internationally. It operates through Ocean, Logistics & Services, Terminals, and Towage & Maritime Services segments. The Ocean segment is involved in container shipping activities, including demurrage and detention, terminal handling, documentation and container services, and container storage, as well as transshipment hubs. The Logistics & Services segment offers integrated transportation solutions; fulfillment and management solutions, such as landside and air transportation; warehousing, distribution, and depot services; and supply chain management, cold chain logistics, and custom brokerage services. The Terminals segment engages in gateway terminal activities. The Towage & Maritime Services segment provides offshore towage and marine services under the Svitzer brand; reefer containers; offshore supply services; trading; and marine services and integrated solutions to the energy sector. It also offers digital solutions that offer booking, managing, tracking of shipments, and other related activities. The company serves fashion and lifestyle, retail, automotive, chemicals, technology, and FMCG industries. A.P. Møller – Mærsk A/S was founded in 1904 and is headquartered in Copenhagen, Denmark.