Is Danaos Corp. overvalued or undervalued?

As of 5 August 2024, Danaos Corp. has moved from a very attractive to an attractive valuation grade. The company is currently considered undervalued, with a P/E ratio of 4, significantly lower than peers like Golar LNG Ltd. at 25.82 and Matson, Inc. at 7.00. Additionally, Danaos Corp. boasts a Price to Book Value of 0.57, an EV to EBIT of 4.33, and an impressive dividend yield of 243.95%, indicating strong cash returns relative to its price.
In comparison to its peers, Danaos Corp. stands out with a lower EV to EBITDA of 3.16, while Matson, Inc. has a higher ratio at 4.55, reinforcing Danaos' relative undervaluation. Furthermore, despite a recent dip in stock price, the company has shown substantial long-term growth, with a remarkable 5-year return of 2138.54%, far exceeding the S&P 500's 92.42% over the same period. This suggests that while the stock may be experiencing short-term volatility, its long-term potential remains strong.