Nordic American Tanker (NAT) has released its 4th quarter results and declared a 46th consecutive dividend. The dividend will be 87¢, payable to shareholders of record on February 25. For 2008, NAT paid total per share dividends of $4.89 (the 4 dividends previous to this announcement). During 2008 NAT shares started the year at about $33.40, reached a high of just under $42 in May and traded in the $24.50 range during the lows of October before finishing the year at $33.75.
Nordic American Tanker currently owns 12 Suezmax tankers, one on long term charter, the rest are chartered in the spot market. The company has recently purchased another Suezmax tanker and plans to take possession this month. The company has two new buildings on order with estimated delivery dates in the 4th quarter of 2009 and the 2nd quarter of 2010. The additions to the fleet are projected to increase distributable cash flow by 25%. NAT is debt free but recently raised about $107 million in capital by issuing stock and increasing the shares outstanding by 10%.
NAT earned an average of $40k per day per ship in the 4th quarter. Currently Suezmax spot rates are in the $34k per day range. Nordic American Tanker has a break even of about $10,000 per day per tanker. This is the main reason I like this stock. It can be profitable and pay a dividend in any market condition. The company's 11.5 years of continued payouts speaks for itself.
Over the last 5 years the annual dividend payout for NAT has averaged $4.72, ranging from $3.81 to $5.85. Holders of the stock have consistently earned over 10%. An eyeball at the stock chart shows the shares averaging around $35 with buying opportunities when the cost falls below $30. I think NAT is an excellent long term holding for the income investor.
Disclosure: I currently have a long position in NAT.