In International Shipping News 25/07/2016
➤ Income Statement
➤ Margins
➤ Growth
WHY THIS MATTERS
Source: Cml
This is a head to head compare of Scorpio Bulkers Inc. and Star Bulk Carriers Corp. We will compare the two companies on revenue growth, earnings, revenue per employee, operating margins, free cash flow and valuation. The head to head compare assigns 100 points in total.
Before we dive into the analysis, we will look at the stock returns for each company over the last three months, six months and the last year. The stock returns do not impact the head to head compare scores which are focused on the fundamentals of each company, but ultimately stock returns are are still a critical piece to a full analysis and compare.
These companies have the same star rating so the head-to-head compare will rely on a deep dive into specific metric comparisons. The CML Star Rating is an objective, quantifiable measure of a company’s operating and financial condition. The rating is computed by measuring numerous elements of the company’s current financial data and their associated changes over time.
Now, let’s dive into the two companies to compare them.
First we turn to the income statement and compare revenue, earnings and revenue per employee for both companies. We note that simple revenue comparisons do not impact the rating.
↪ Star Bulk Carriers Corp. has larger revenue in the last year than Scorpio Bulkers Inc. Raw revenue comps do not affect the head to head rating.
↪ Both SALT and SBLK have negative earnings over the last year. But, the difference in the size of losses has limited impact on the head-to-head comparison.
↪ SALT generates massively larger revenue per employee ($15.6 million) than SBLK ($1.8 million).
Next we create some derived metrics to compare the the amount of revenue earned per dollar of expense and the amount of free cash flow earned per dollar of revenue. Margins are one of the fairest ways to compare companies since they remove some of the bias of large versus small numbers.
↪ Both Star Bulk Carriers Corp. and Scorpio Bulkers Inc generate an operating loss, although SBLK shows a much better operating margin.
↪ Both SBLK and SALT generate a cash flow loss, although SBLK shows a remarkably better cash flow margin.
Finally we compare the financial metrics related to growth: revenue growth rates and price to sales.
↪ Both companies are growing revenue. Star Bulk Carriers Corp. is growing revenue massively faster than Scorpio Bulkers Inc.
↪ For every $1 in revenue, the stock market prices in $3.75 in market cap for SALT and $0.72 in market cap for SBLK.
Star Bulk Carriers Corp. (NASDAQ:SBLK) defeats Scorpio Bulkers Inc (NYSE:SALT) : 80 to 20
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Source: Cml
