Critical Review: GATX (NYSE:GATX) & Hafnia (NYSE:HAFN)

Hafnia (NYSE:HAFN) and GATX (NYSE:GATX) are both mid-cap transportation companies, but which is the better investment? We will compare the two businesses based on the strength of their institutional ownership, analyst recommendations, dividends, profitability, risk, earnings and valuation.

Institutional and Insider Ownership

93.1% of GATX shares are owned by institutional investors. 2.0% of GATX shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Hafnia and GATX’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Hafnia	47.30%	34.28%	20.51%
GATX	17.76%	11.98%	2.37%

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Hafnia and GATX, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Hafnia	0	0	2	0	3.00
GATX	0	2	2	0	2.50

Hafnia currently has a consensus target price of $9.00, indicating a potential upside of 61.00%. GATX has a consensus target price of $150.25, indicating a potential downside of 1.38%. Given Hafnia’s stronger consensus rating and higher possible upside, equities analysts plainly believe Hafnia is more favorable than GATX.

Dividends

Hafnia pays an annual dividend of $1.62 per share and has a dividend yield of 29.0%. GATX pays an annual dividend of $2.32 per share and has a dividend yield of 1.5%. Hafnia pays out 103.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GATX pays out 31.0% of its earnings in the form of a dividend. GATX has increased its dividend for 14 consecutive years.

Earnings & Valuation

This table compares Hafnia and GATX”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Hafnia	$1.92 billion	1.48	$793.28 million	$1.57	3.56
GATX	$1.41 billion	3.83	$259.20 million	$7.48	20.37

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

Summary

Hafnia beats GATX on 8 of the 15 factors compared between the two stocks.

About Hafnia

Hafnia Limited owns and operates oil product tankers in Bermuda. It operates through Long Range II, Long Range I, Medium Range (MR), Handy size, and Specialized segments. The company transports clean and dirty, refined oil products, vegetable oil, and easy chemicals to national and international oil companies, and chemical companies, as well as trading and utility companies; and owns and operates 200 vessels. It provides ship owning, ship-management, investment, management, corporate support, and agency office services. In addition, the company provides integrated shipping platform, including technical management, commercial and chartering services, pool management, and large-scale bunker desk services. Hafnia Limited is based in Hamilton, Bermuda.

About GATX

GATX Corporation, together its subsidiaries, operates as railcar leasing company in the United States, Canada, Mexico, Europe, and India. It operates through three segments: Rail North America, Rail International, and Portfolio Management. The company leases tank and freight railcars, and locomotives for petroleum, chemical, food/agriculture, and transportation industries. It also offers maintenance services, including the interior cleaning of railcars, routine maintenance and repair of car body and safety appliances, regulatory compliance works, wheelset replacements, interior blast and lining, exterior blast and painting, and car stenciling services. In addition, the company manufactures commercial aircraft jet engines and leases aircraft spare engines; and owns and manages tank containers that are leased to chemical, industrial gas, energy, food, cryogenic and pharmaceutical industries, and tank container operators, as well as provides tank container sourcing, remarketing, and inspection and maintenance services. As of December 31, 2023, it owned and operated a fleet of approximately 148,500 railcars; 493 four-axle and 30 six-axle locomotives; 399 aircraft spare engines; and 23,931 tank containers. GATX Corporation was founded in 1898 and is headquartered in Chicago, Illinois.