Knight Offshore Partners (KNOP) is a limited partnership managed and operated by Knutsen NYK (KNOT).
KNOP competes in a niche industry (shuttle tanker transport) with very favorable competitive characteristics.
These characteristics, plus the firm’s strong balance sheet and counterparty credit ratings augur for a low risk dividend producer.
Valuation using an perpetuity pricing model indicates that KNOP is undervalued by the market.
KNOP must be viewed as a Return of Capital, and a Return of Capital (depreciation) when valuing the units and the dividend.
Shuttle Tanker Industry:
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