Investment ideas and financial education

Tsakos Energy Navigation – a leveraged but safe tanker play


Today I plan to cover a Greek tanker name that has endured a couple of very dilutive capital increases since the rates started dropping and that has cut its USD0.15 quarterly dividend to 0.05, but without cancelling it as many others have been forced to. Current yield is 5.4%, but the stock is a deleveraging story rather than a dividend play. Tsakos Energy Navigation, 39% owned by the Tsakos family, certainly offers upside with its net debt/EBITDA ratio (2012) above 10 (scary, isn’t it?) – if it makes it through. 4Q12 results were released today, and they came well ahead of expectations (and share jumped (+7.6%). For more details, full report is here.


One comment on “Tsakos Energy Navigation – a leveraged but safe tanker play

  1. jjsumoy

    After a nice jump following a surprise 1Q in the black, the stock has cooled down with rising yields.
    2Q13 will show impact of the USD2M/quarter preferred share divvy payments, but this will be compensated by the USD5M/quarter additional net profit from the couple of DP suezmaxes recently delivered. All in, and with the contribution of a (better) charter for Neo Energy LNG carrier, I do expect EO2013 EPS in excess of 0.2 (well above current Bloomberg consensus of -0.04). Cash flow generated should be enough to pay the USD136M short term debt; any shortfall can be easily covered by selling vessels.

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This entry was posted on 22/04/2013 by and tagged , , , , , , .


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