Financial Analysis: Norwegian Cruise Line (NASDAQ:NCLH) versus KNOT Offshore Partners (NYSE:KNOP)

KNOT Offshore Partners (NYSE:KNOP – Get Rating) and Norwegian Cruise Line (NASDAQ:NCLH – Get Rating) are both transportation companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, risk, analyst recommendations and earnings.

Institutional & Insider Ownership

15.9% of KNOT Offshore Partners shares are held by institutional investors. Comparatively, 57.2% of Norwegian Cruise Line shares are held by institutional investors. 0.8% of Norwegian Cruise Line shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings for KNOT Offshore Partners and Norwegian Cruise Line, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
KNOT Offshore Partners	0	1	0	0	2.00
Norwegian Cruise Line	0	0	0	0	N/A

KNOT Offshore Partners presently has a consensus target price of $15.50, indicating a potential upside of 170.51%. Given KNOT Offshore Partners’ higher probable upside, equities analysts clearly believe KNOT Offshore Partners is more favorable than Norwegian Cruise Line.

Valuation & Earnings

This table compares KNOT Offshore Partners and Norwegian Cruise Line’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
KNOT Offshore Partners	$281.13 million	0.69	$53.01 million	$2.22	2.58
Norwegian Cruise Line	$4.84 billion	1.14	-$2.27 billion	($5.41)	-2.42

KNOT Offshore Partners has higher earnings, but lower revenue than Norwegian Cruise Line. Norwegian Cruise Line is trading at a lower price-to-earnings ratio than KNOT Offshore Partners, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

KNOT Offshore Partners has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500. Comparatively, Norwegian Cruise Line has a beta of 2.51, meaning that its stock price is 151% more volatile than the S&P 500.

Profitability

This table compares KNOT Offshore Partners and Norwegian Cruise Line’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
KNOT Offshore Partners	28.16%	12.18%	4.23%
Norwegian Cruise Line	-46.86%	-286.66%	-10.87%

Summary

KNOT Offshore Partners beats Norwegian Cruise Line on 7 of the 12 factors compared between the two stocks.

About KNOT Offshore Partners

(Get Rating)

KNOT Offshore Partners LP is engaged in the operation and acquisition of shuttle tankers under long-term charters. Its fleet consists of sixteen shuttle tankers, which are vessels designed to transport crude oil and condensates from offshore oil field installations to onshore terminals and refineries. The company was founded on February 21, 2013 and is headquartered in Aberdeen, the United Kingdom.

About Norwegian Cruise Line

(Get Rating)

Norwegian Cruise Line Holdings Ltd. engages in the provision of cruise travel services. It provides cruise experiences for travelers with itineraries in Europe, Asia, Australia, New Zealand, South America, Africa, Canada, Bermuda, Caribbean, Alaska and Hawaii. It also offers an entirely inter-island itinerary in Hawaii. Its brands include Norwegian Cruise Line, Oceania Cruises, and Regent Seven Seas Cruises. The company was founded in 1966 and is headquartered in Miami, FL.