- 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.
For further details see:
Nordic American Tankers: Good Dividends For An Oil Tanker Company, But That's Not Saying Much