Head to Head Analysis: Nordic American Tankers (NYSE:NAT) versus Peabody Energy (NYSE:BTU)

Nordic American Tankers (NYSE:NAT) and Peabody Energy (NYSE:BTU) are both energy companies, but which is the better business? We will contrast the two businesses based on the strength of their valuation, earnings, dividends, institutional ownership, analyst recommendations, risk and profitability.

Insider & Institutional Ownership

44.3% of Nordic American Tankers shares are owned by institutional investors. Comparatively, 87.4% of Peabody Energy shares are owned by institutional investors. 2.9% of Nordic American Tankers shares are owned by insiders. Comparatively, 0.5% of Peabody Energy shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Nordic American Tankers has a beta of -0.54, indicating that its stock price is 154% less volatile than the S&P 500. Comparatively, Peabody Energy has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500.

Dividends

Nordic American Tankers pays an annual dividend of $1.08 per share and has a dividend yield of 13.1%. Peabody Energy pays an annual dividend of $0.30 per share and has a dividend yield of 1.2%. Nordic American Tankers pays out 183.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Peabody Energy pays out -20.0% of its earnings in the form of a dividend. Nordic American Tankers has increased its dividend for 1 consecutive years and Peabody Energy has increased its dividend for 1 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Nordic American Tankers and Peabody Energy, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nordic American Tankers	1	2	2	0	2.20
Peabody Energy	2	2	2	0	2.00

Nordic American Tankers currently has a consensus target price of $5.33, suggesting a potential downside of 35.16%. Peabody Energy has a consensus target price of $33.88, suggesting a potential upside of 34.80%. Given Peabody Energy’s higher possible upside, analysts clearly believe Peabody Energy is more favorable than Nordic American Tankers.

Valuation and Earnings

This table compares Nordic American Tankers and Peabody Energy”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nordic American Tankers	$182.54 million	9.54	$12.27 million	$0.59	13.94
Peabody Energy	$3.86 billion	0.79	-$52.90 million	($1.50)	-16.75

Nordic American Tankers has higher earnings, but lower revenue than Peabody Energy. Peabody Energy is trading at a lower price-to-earnings ratio than Nordic American Tankers, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Nordic American Tankers and Peabody Energy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nordic American Tankers	47.04%	20.58%	10.38%
Peabody Energy	-4.56%	-5.22%	-3.22%

Summary

Nordic American Tankers beats Peabody Energy on 10 of the 15 factors compared between the two stocks.

About Nordic American Tankers

Nordic American Tankers Limited, a tanker company, acquires and charters double-hull tankers in Bermuda and internationally. It operates a fleet of 20 Suezmax crude oil tankers. The company was incorporated in 1995 and is headquartered in Hamilton, Bermuda.

About Peabody Energy

Peabody Energy Corporation engages in coal mining business in the United States, Japan, Taiwan, Australia, India, Brazil, Belgium, Chile, France, Indonesia, China, Vietnam, South Korea, Germany, and internationally. The company operates through Seaborne Thermal, Seaborne Metallurgical, Powder River Basin, Other U.S. Thermal, and Corporate and Other segments. It is involved in the mining, preparation, and sale of thermal coal primarily to electric utilities; mining bituminous and sub-bituminous coal deposits; low sulfur and high British thermal unit thermal coal; and mining metallurgical coal, such as hard coking coal, semi-hard coking coal, semi-soft coking coal, and pulverized coal injection coal. The company supplies coal primarily to electricity generators, industrial facilities, and steel manufacturers. It also engages in marketing and brokering of coal from other coal producers; trading of coal and freight-related contracts, as well as provides transportation-related services. The company was founded in 1883 and is headquartered in Saint Louis, Missouri.