8. Nordic American Tankers Limited (NYSE:NAT)
Number of Hedge Fund Holders: 18
Dividend Yield as of July 8: 11.36%
Nordic American Tankers Limited (NYSE:NAT) is a Bermuda-based international tanker company that owns and operates Suezmax tankers. Since the start of 2024, the stock has declined by over 12% because of the escalated geopolitical tensions across the Red Sea. The company boasts one of the largest fleets of Suezmax tankers, which are reportedly in high demand due to the ongoing disruptions. Its business model positions it for long-term benefits. The company is expected to gain from the historically low supply of Suezmax tankers over the next two to three years. Environmental regulations, rising steel and production costs, and higher interest rates make investing in new ships difficult. According to the company’s recent earnings report, only six new vessels are expected to join the global Suezmax fleet in 2024. In addition, the rise in US exports and Chinese imports is boosting demand for transportation services.
Despite having a strong business model, Nordic American Tankers Limited (NYSE:NAT) is not immune to ongoing global challenges. Fluctuating oil prices, geopolitical tensions, and high operating costs, which are around $9,000 per ship daily, could weigh heavily on the company. That said, it remains confident in the strong demand for its vessels. The supply-demand dynamics in the market for the company’s fleet are currently favorable, supporting this positive outlook. Additionally, the company maintains one of the lowest debt levels among publicly traded tanker companies. As of March 31, 2024, the company’s net debt—which is calculated by subtracting current assets from total liabilities—was $228 million. With a fleet of 20 vessels, this translates to $11.4 million of debt per ship. It also has a lower debt-to-equity ratio of 0.5. Wall Street analysts have a Moderate Buy rating on the stock with a $5.40 price target, reflecting a 43.2% upside potential.
Nordic American Tankers Limited (NYSE:NAT) pays special attention to strategic timing and financing of expansions, which are crucial factors for ensuring both financial stability and commitment to dividend payments. The company has been paying regular dividend payments for 107 consecutive quarters, which makes NAT one of the best dividend stocks on our list. It currently offers a quarterly dividend of $0.12 per share and has a dividend yield of 11.36%, as of July 8. The company expects to increase its payouts in improved market conditions. Its cash position is also strong, generating over $37.5 million in operating cash flow in the first quarter of 2024.
Nordic American Tankers Limited (NYSE:NAT) was a part of 18 hedge fund portfolios at the end of Q1 2024, up from 16 in the previous quarter, as per Insider Monkey’s database. The stakes held by these hedge funds have a collective value of over $20.2 million. Among these funds, Two Sigma Advisors owned the largest position in the company.
