Navigator (NYSE:NVGS) vs. Himalaya Shipping (NYSE:HSHP) Critical Analysis

Himalaya Shipping (NYSE:HSHP) and Navigator (NYSE:NVGS) are both small-cap transportation companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, institutional ownership, profitability, valuation, analyst recommendations, risk and dividends.

Valuation and Earnings

This table compares Himalaya Shipping and Navigator”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Himalaya Shipping	$112.30 million	1.72	$1.51 million	$1.39	3.49
Navigator	$564.28 million	1.94	$82.25 million	$1.13	13.26

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

Insider & Institutional Ownership

22.3% of Himalaya Shipping shares are held by institutional investors. Comparatively, 19.0% of Navigator shares are held by institutional investors. 0.4% of Navigator shares are held by insiders. 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Himalaya Shipping	21.93%	15.72%	3.14%
Navigator	14.48%	7.40%	4.23%

Analyst Recommendations

This is a breakdown of recent ratings for Himalaya Shipping and Navigator, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Himalaya Shipping	1	0	0	0	1.00
Navigator	0	0	5	0	3.00

Navigator has a consensus target price of $21.60, suggesting a potential upside of 44.19%. Given Navigator’s stronger consensus rating and higher probable upside, analysts clearly believe Navigator is more favorable than Himalaya Shipping.

Dividends

Himalaya Shipping pays an annual dividend of $0.20 per share and has a dividend yield of 4.1%. Navigator pays an annual dividend of $0.20 per share and has a dividend yield of 1.3%. Himalaya Shipping pays out 14.4% of its earnings in the form of a dividend. Navigator pays out 17.7% 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. Himalaya Shipping is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Himalaya Shipping has a beta of 2.36, indicating that its share price is 136% more volatile than the S&P 500. Comparatively, Navigator has a beta of 1.47, indicating that its share price is 47% more volatile than the S&P 500.

Summary

Navigator beats Himalaya Shipping on 9 of the 16 factors compared between the two stocks.

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.

About Navigator

Navigator Holdings Ltd. engages in owning and operating a fleet of liquefied gas carriers worldwide. It provides international and regional seaborne transportation services of petrochemical gases, liquefied petroleum gases, and ammonia for energy companies, industrial users, and commodity traders. The company also offers ship shore infrastructure and consultancy services. It operates a fleet of 56 semi- or fully-refrigerated liquefied gas carriers. The company was formerly known as Isle of Man public limited company and changed its name to Navigator Holdings Ltd. in 2006. Navigator Holdings Ltd. was incorporated in 1997 and is based in London, the United Kingdom.