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Nordic American Tanker (NYSE:NAT) has released their 4th quarter results, and they are not at the level of income and dividend I expected. (Press Release)

With per day spot rates averaging $27,000 for the quarter, the company was able to raise the dividend to 50¢ from the 40¢ in Q3. I was expecting them to get closer to the $1.00 paid, a year ago. Spot rates for tankers did not pick up until January when the company was making $45,000 per day. So the 1st quarter should show improved results.

Investing in NAT is an experience for the patient. The company makes all of its money leasing their dozen Suezmax tankers on the spot market. The majority of the free cash flow is paid out as dividends. The challenge is the tanker spot market, and thus the dividends, can and will fluctuate wildly.

The last couple of quarters have been some of the lowest in the company history. I like Nordic American because they have the lowest expenses per day in the tanker space, so when things are good, they are really good. They have also been growing the fleet, up from 3 ships in 2004 and 2 more currently on order.

A note of humor, CEO Herbjorn Hansson had this interview on CNBC. Bad information and bad questions abound. For starters, I am pretty sure NAT is not even near the top for being the largest tanker company. Take a look and judge for yourself.

Disclosure: I currently do not have a position in NAT.

Source: Nordic American Tanker's Disappointing Quarter