Reviewing Himalaya Shipping (NYSE:HSHP) and SFL (NYSE:SFL)

SFL (NYSE:SFL) and Himalaya Shipping (NYSE:HSHP) are both small-cap transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, earnings, valuation, risk, institutional ownership, dividends and analyst recommendations.

Valuation and Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
SFL	$752.29 million	1.94	$83.94 million	$1.11	9.47
Himalaya Shipping	$36.74 million	7.89	$1.51 million	N/A	N/A

SFL has higher revenue and earnings than Himalaya Shipping.

Profitability

This table compares SFL and Himalaya Shipping’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
SFL	16.03%	14.61%	4.03%
Himalaya Shipping	21.93%	15.72%	3.14%

Analyst Recommendations

This is a summary of recent ratings for SFL and Himalaya Shipping, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
SFL	0	0	2	0	3.00
Himalaya Shipping	1	0	0	0	1.00

SFL presently has a consensus target price of $16.00, suggesting a potential upside of 52.16%. Given SFL’s stronger consensus rating and higher probable upside, equities analysts clearly believe SFL is more favorable than Himalaya Shipping.

Insider and Institutional Ownership

28.6% of SFL shares are owned by institutional investors. Comparatively, 22.3% of Himalaya Shipping shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

SFL has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, Himalaya Shipping has a beta of 2.63, suggesting that its stock price is 163% more volatile than the S&P 500.

Dividends

SFL pays an annual dividend of $1.08 per share and has a dividend yield of 10.3%. Himalaya Shipping pays an annual dividend of $0.20 per share and has a dividend yield of 2.8%. SFL pays out 97.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

SFL beats Himalaya Shipping on 8 of the 13 factors compared between the two stocks.

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.

About Himalaya Shipping

Himalaya Shipping Ltd. provides dry bulk shipping services worldwide. The company operates a fleet of vessels. It serves major commodity trading, commodity and energy transition, and multi-modal transport companies. Himalaya Shipping Ltd. was incorporated in 2021 and is based in Hamilton, Bermuda.