Nordic American Tankers Ltd's Dividend Analysis
Assessing the Sustainability of Nordic American Tankers Ltd's Upcoming Dividend
Nordic American Tankers Ltd(NYSE:NAT) recently announced a dividend of $0.06 per share, payable on 2024-01-17, with the ex-dividend date set for 2023-12-19. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Nordic American Tankers Ltd's dividend performance and assess its sustainability.
What Does Nordic American Tankers Ltd Do?
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Nordic American Tankers Ltd owns and operates double hull crude oil tankers. It is an international tanker company that owns double-hull Suezmax tankers. It operates vessels in the spot market or on spot market-related charters pursuant to cooperative arrangements with third parties. The company's fleet consists of crude oil tankers, and all of its vessels are employed in the spot market. The company has only one type of vessel - Suezmax crude oil tankers. It operates in markets that are very competitive and based mainly on supply and demand.
A Glimpse at Nordic American Tankers Ltd's Dividend History
Nordic American Tankers Ltd has maintained a consistent dividend payment record since 1997. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Nordic American Tankers Ltd's Dividend Yield and Growth
As of today, Nordic American Tankers Ltd currently has a 12-month trailing dividend yield of 11.62% and a 12-month forward dividend yield of 5.81%. This suggests an expectation of decreased dividend payments over the next 12 months.
Over the past three years, Nordic American Tankers Ltd's annual dividend growth rate was 3.20%. Extended to a five-year horizon, this rate decreased to -23.30% per year. And over the past decade, Nordic American Tankers Ltd's annual dividends per share growth rate stands at -23.70%.
Based on Nordic American Tankers Ltd's dividend yield and five-year growth rate, the 5-year yield on cost of Nordic American Tankers Ltd stock as of today is approximately 3.08%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Nordic American Tankers Ltd's dividend payout ratio is 0.86. And this may suggest that the company's dividend may not be sustainable.
Nordic American Tankers Ltd's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Nordic American Tankers Ltd's profitability 4 out of 10 as of 2023-09-30, suggesting the dividend may not be sustainable. The company has reported net profit in 3 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Nordic American Tankers Ltd's growth rank of 4 out of 10 suggests that the company has poor growth prospects and thus, the dividend may not be sustainable. Revenue is the lifeblood of any company, and Nordic American Tankers Ltd's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Nordic American Tankers Ltd's revenue has increased by approximately -8.90% per year on average, a rate that underperforms than approximately 81.32% of global competitors.
Concluding Thoughts on Nordic American Tankers Ltd's Dividends
Considering Nordic American Tankers Ltd's dividend payments, growth rate, payout ratio, profitability, and growth metrics, investors should exercise caution. The high dividend yield may be attractive, but the negative growth rates and a payout ratio that suggests limited room for growth or shock absorption, coupled with a lower profitability rank, indicate potential sustainability issues. Investors must weigh the allure of immediate yields against the long-term viability of dividends. It's essential to monitor the company's financial health and market position to make an informed decision. For those seeking income-generating stocks, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
