Wells Fargo Securities has taken a balanced view on Herbjorn Hansson’s Nordic American Tankers in taking up coverage of the New York-listed owner today.
Analyst Mike Webber placed a market perform rating on the suezmax specialist in an introductory note today.
Webber says the rating took into account the long dividend history of the company, low debt levels and its older fleet and tanker sector headwinds.
NAT has paid a dividend for 77 consecutive quarters, which the analyst says is unique. He also highlighted the company’s strong retail investor following, its exclusive suezmax focus and solid governance track record.
However, he also pointed to a mixed market view for the next three to six months, a capital need for fleet renewal with 10 vessels over the age of 15 and firm valuation in the market.
Webber says while contango is reaching potentially profitable levels, sustainable inventory destocking is required for tanker equities to turn the corner.
“Longer-term, given varying expectations for forward oil demand growth (we’re on the light side), the looming prospect for an OPEC cut, and the heft of the crude tanker orderbook still in front of us, we can’t yet bring ourselves to get structurally long tankers,” Webber said. “However, the recent shift in dynamics has certainly made that potential idea/trade more plausible.”
According to Bloomberg, Vanguard Group is the largest shareholder in NAT, followed by Blackrock and then Hansson. Lourian Capital and Morgan Stanley complete the top five.
