NTOIF - Neste: The Company's Products Include A Huge Growth Product
2024-07-02 10:04:02 ET
Summary
- Neste Oyj stock is down 70% from an all-time high, presenting a good value opportunity with steady long-term growth potential.
- Neste's sustainable aviation fuel SAF has a very high growth potential.
- The company has embarked on major maintenance and transformation works at its refineries. This will enable a significant increase in production volumes in the future.
Investment Thesis
Down 70% from its all-time high to date, Neste Oyj ( NTOIF ) has become a good value stock today. Despite what I believe to be temporary difficulties, the company remains profitable and has a favorable valuation. Although Neste's management describes the prospects for 2024 as rather poor, in the long term, market demand for the company's renewable fuels is steadily growing. The world's climate problems will persist, and so will the demand for renewable diesel for trucks and green fuels for airplanes. Investing in Neste requires patience, but the company's chosen strategy seems right. In addition, the company offers a decent 7.36% dividend yield.
Business Overview
Neste was founded in 1948 as Finland's national gasoline company. In 1995, the company was listed on the Helsinki stock exchange. The company started producing biofuels in 2007 at the Porvoo refinery. In 2011, a new refinery was launched in Rotterdam, the Netherlands. Since 2015, the company has focused on the renewable energy business. In addition to the factories in Porvoo and Rotterdam, Neste also has a refinery in Singapore , which was established in 2010. The Singapore plant is the world's largest renewable fuel refinery. The annual production of this plant is 2.6 million tons, of which 1 million is sustainable aviation fuel (SAF). In terms of total production volumes, the Singapore plant ranks 15th in the world, if plants operating on fossil raw materials are also taken into account....
Neste: The Company's Products Include A Huge Growth Product