Performance Shipping (NASDAQ:PSHG) and Himalaya Shipping (NYSE:HSHP) Critical Comparison

Himalaya Shipping (NYSE:HSHP) and Performance Shipping (NASDAQ:PSHG) are both small-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.

Earnings and Valuation

This table compares Himalaya Shipping and Performance Shipping”s gross 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	11.09
Performance Shipping	$89.61 million	0.22	$69.41 million	$1.12	1.44

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.

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 6.2%. 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

This is a breakdown of recent ratings and price targets for Himalaya Shipping and Performance Shipping, as reported by MarketBeat.com.

	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, indicating a potential upside of 303.73%. Given Performance Shipping’s stronger consensus rating and higher possible upside, analysts plainly believe Performance Shipping is more favorable than Himalaya Shipping.

Risk and Volatility

Himalaya Shipping has a beta of 2.56, meaning that its stock price is 156% more volatile than the S&P 500. Comparatively, Performance Shipping has a beta of -0.39, meaning that its stock price is 139% less volatile than the S&P 500.

Institutional and Insider Ownership

22.3% of Himalaya Shipping shares are owned by institutional investors. Comparatively, 19.9% of Performance Shipping shares are owned by institutional investors. 0.4% of Performance Shipping 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 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%

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.