A comprehensive analysis of Nordic American Tankers Ltd's dividend history, yield, growth rate, and sustainability
Nordic American Tankers Ltd(NAT, Financial) recently announced a dividend of $0.13 per share, payable on 2023-10-05, with the ex-dividend date set for 2023-09-13. 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 deep dive into Nordic American Tankers Ltds dividend performance and assess its sustainability.
What Does Nordic American Tankers Ltd Do?
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 9.97% and a 12-month forward dividend yield of 13.65%. This suggests an expectation of increase 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 2.65%.
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 2023-06-30, Nordic American Tankers Ltd's dividend payout ratio is 0.66.
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 2023-06-30, suggesting the dividend may not be sustainable. The company has reported net profit in 3 years out of 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 81.08% of global competitors.
Next Steps
While Nordic American Tankers Ltd has a consistent dividend payment record, its declining growth rate and profitability rank raise concerns about the sustainability of its future dividends. The company's payout ratio indicates a significant portion of earnings are retained, but its growth prospects do not inspire confidence in its ability to sustain dividend payments in the long run. Investors should carefully consider these factors before making investment decisions.
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