Nordic American Tankers Q2: Good Quarter But Little Reason For Excitement, Hold

(6min)

Summary

  • Suezmax tanker pure play Nordic American Tankers Limited reported Q2/2024 results ahead of consensus expectations and declared an unchanged quarterly cash dividend of $0.12 per common share.
  • While results came in ahead of expectations, NAT's average daily time charter equivalent ("TCE") rate underperformed peers by a wide margin again.
  • With charter rates under pressure in recent weeks, investors might have to prepare for a sequential dividend cut.
  • While the company trades at a sizeable discount to NAV, larger peer International Seaways appears to offer considerably better value.
  • With Nordic American Tankers' operational underperformance unlikely to reverse anytime soon and a sequential dividend cut in the cards, I continue to see little reason to open or add to existing positions. However, the company's generous approach to shareholder capital returns still makes the stock a "Hold".
  • Looking for a helping hand in the market? Members of Value Investor's Edge get exclusive ideas and guidance to navigate any climate. Learn More »

Oil Tanker

HeliRy

Note:

I have covered Nordic American Tankers Limited (NYSE:NAT) previously, so investors should view this as an update to my earlier articles on the company.

Last week, Suezmax tanker pure play Nordic American Tankers Limited or "NAT" reported

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This article was written by

20.05K Followers

I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.

I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.

Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community.

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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