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Actionable news in DHT: DHT HOLDINGS Inc,

DHT Holdings' Dividend Target: 0.08 Cents Per Share


DHT Holdings is coming off a terrific period with great spot rates.

Current rates aren't great at all and there's little reason for near-term optimism.

The dividend is flexible and based on real underlying earnings.

Barring a lucky spike in spot rates, the dividend is likely to be reduced substantially.

Image: DHT Leopard

So far I've been on the wrong side of the DHT Holdings (NYSE:DHT) debate in 2016. I've recommended it in the distant past but after the recent earnings call I'm more convinced this isn't the right time to get involved.

After a preliminary read there appears to be a lot of good news on the call. The company had a record quarter in terms of net income, bank debt was further reduced by $42 million, eight ships on time charter contracts and everything together resulted in a $0.23 quarterly dividend. Not bad on a ~$5 stock.

The stock traded up sharply after earnings but if you ask me the market is relying too much on past earnings while the company clearly communicates future earnings and dividends are unlikely to come anywhere near the current level.

Last time I wrote about DHT Holdings management, who are very cycle aware, they see shipping to be between a...