FLNG - FLEX LNG: Quality Fleet Superior Margins And Attractive Yields

2024-02-13 20:08:03 ET

Summary

• The LNG market seems oversupplied, considering the record-high order book. Going deeper, however, reveals growth potential.
• FLEX LNG is one of the best ways to play those dynamics. The company has a young fleet equipped with the last generation of power plants.
• Having a new fleet pays off. FLNG has superior margins, an 81.1% gross margin, and a 76.2% EBITDA margin. FLNG has leveraged its capital structure due to its intensive capital investments.
• The company trades at 106% P/NAV, which is the highest in its peer group. But let’s not forget that inflationary pressures push tangible asset values higher. I give FLNG a buy rating.

Introduction

FLEX LNG ( FLNG ) is an enticing investing idea for shipping investors. The company operates in the LNG shipping industry. It has a young fleet equipped with new-generation propulsion plants. FLNG has leveraged its capital structure due to its intensive capital investments over the last few years. Having new ships with efficient propulsion pays off, and FLNG scores the highest margins against its peers....

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