NAT - Nordic American Tankers: Good Dividends For An Oil Tanker Company But That's Not Saying Much

• Nordic American Tankers has a better dividend history than their peers, although that is a rather low bar to jump since oil tanker companies are fundamentally unattractive.
• Even after reducing their dividend by 80% they still remain risky due to their unpredictable operating cash flow that based on their historical average would only provide weak coverage.
• Their high leverage also means that their financial position does not provide a sufficient medium-term backstop.
• One bright spot is their strong liquidity, which means they can at least remain a going concern even after charter rates plunge.
• Since this is rather unattractive, I believe that a neutral rating is appropriate for this somewhat mixed situation.

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