A must-know oil tanker company overview: Teekay Tankers Ltd.
Must-know company overview: Is Teekay Tankers undervalued? (Part 1 of 7)
Teekay Tankers
With a market cap of $308.4 million, Teekay Tankers Ltd.(TNK) pays a regular quarterly dividend of $0.03 per share. Meanwhile, its parent company, Teekay Corporation (TK), has a market cap of $4.2 billion.
In December 2007, Teekay Tankers Ltd. was formed by Teekay Corporation in order to expand its conventional oil tanker business. As its majority shareholder, TK manages all the TNK assets and operations, including its marine systems and standards. Plus, Teekay Tankers owns a minority interest in Tanker Investments Ltd.
Currently, TNK owns a fleet of 27 double-hull vessels, including 11 Aframax tankers, ten Suezmax tankers, three Long Range 2 (LR2) product tankers, three Medium-Range (MR) product tankers, and one time-chartered Aframax tanker. All these vessels are managed by Teekay Tankers Management Services Ltd., an affiliate of TK, using a mix of short- and medium-term fixed-rate time-charter contracts and spot tanker market trading. TNK also owns a Very Large Crude Carrier (VLCC) through a 50% owned joint venture.
Trading at a beta of 2.1, TNK recorded an increase of 34.2% compared to a rise of 17.4% by S&P 500. Meanwhile, peers like Frontline Ltd (FRO), Nordic American Tanker Ltd. (NAT), and DHT Holdings Inc. (DHT) have recorded 26.2%, 4.7%, and 58.5% increases, respectively, in the past year. Teekay Corp. (TK), which is a part of the top fund holdings of the Guggenheim Shipping ETF (SEA), recorded an increase of 51.4% in the past year. Teekay Offshore Partners LP (TOO) and Teekay LNG Partners LP (TGP) are also a part of the top fund holdings of SEA.
Let’s discuss in detail TNK’s fixed dividend payout policy, balanced fleet chartering mix, and transformation to a full-service conventional tanker platform. Find out more in the next part of this series.
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