Investors looking to invest in oil tankers tend to back only major companies and overlook other opportunities. The oil shipping industry is an important part of the overall oil and gas business. Two-thirds of all oil transportation is by ship. Major oil demand of the world comes from the developing market, China followed by India, Europe and Southeast Asia. China’s projected imports, India’s increasing population and 50% increase in consensus projection will lead to increased oil shipping.
Oil tanker companies and their investors are poised to receive well above-average returns on investment due to the steadily increasing worldwide demand for oil shipping. Here are three stocks that attract attention in the oil shipping industry.
COMPANY | STOCK | CORE BUSINESS | FLEET | MARKET CAP | DIVIDEND YIELD | P/B RATIO |
Nordic American Tankers Ltd | NAT | Operates on spot market – Each ship is hired and paid for individual trip | 24 double-hull Suezmax tankers | $1.3 billion | 10.5% | 1.5 |
Ship Finance International Ltd | SFL | Operates on medium-term to long-term charter or leasing agreements | Suezmax tankers, VLCC tankers, Container ships, Offshore oil rig supply ships, Chemical transport ships Car carriers | $1.5 billion | 10.2%. | 1.2 |
Teekay Tankers Ltd. | TNK | Operates on 1) Spot market basis, 2) Short-term to medium-term charter contracts | 12 Suezmax tankers 9 double-hull Aframax-class oil tankers | $678 million | 1.7% | – |
These companies generate more revenues and are more stable in providing investment opportunities.
Source: Investopedia
