Himalaya Shipping (NYSE:HSHP – Get Free Report) and Performance Shipping (NASDAQ:PSHG – Get Free Report) are both small-cap transportation companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.
Risk & Volatility
Himalaya Shipping has a beta of 2.56, suggesting that its stock price is 156% more volatile than the S&P 500. Comparatively, Performance Shipping has a beta of -0.39, suggesting that its stock price is 139% less volatile than the S&P 500.
Dividends
Himalaya Shipping pays an annual dividend of $0.19 per share and has a dividend yield of 3.6%. Performance Shipping pays an annual dividend of $0.10 per share and has a dividend yield of 6.4%. Himalaya Shipping pays out 39.6% of its earnings in the form of a dividend. Performance Shipping pays out 8.9% 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. Performance Shipping is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Recommendations
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Himalaya Shipping | 1 | 0 | 0 | 0 | 1.00 |
| Performance Shipping | 0 | 0 | 1 | 0 | 3.00 |
Performance Shipping has a consensus target price of $6.50, suggesting a potential upside of 315.34%. Given Performance Shipping’s stronger consensus rating and higher probable upside, analysts clearly believe Performance Shipping is more favorable than Himalaya Shipping.
Earnings & Valuation
This table compares Himalaya Shipping and Performance Shipping”s revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Himalaya Shipping | $123.58 million | 1.72 | $1.51 million | $0.48 | 11.14 |
| Performance Shipping | $87.45 million | 0.22 | $69.41 million | $1.12 | 1.40 |
Performance Shipping has lower revenue, but higher earnings than Himalaya Shipping. Performance Shipping is trading at a lower price-to-earnings ratio than Himalaya Shipping, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Himalaya Shipping and Performance Shipping’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Himalaya Shipping | 17.03% | 13.36% | 2.49% |
| Performance Shipping | 49.49% | 16.99% | 13.89% |
Insider and Institutional Ownership
22.3% of Himalaya Shipping shares are held by institutional investors. Comparatively, 19.9% of Performance Shipping shares are held by institutional investors. 0.4% of Performance Shipping shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Performance Shipping beats Himalaya Shipping on 11 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 Performance Shipping
Performance Shipping Inc. provides shipping transportation services through its tanker vessels worldwide. As of December 31, 2023, its fleet consisted of seven Aframax tanker vessels with a combined carrying capacity of 735,910 DWT. The company was incorporated in 2010 and is based in Athens, Greece.
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