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Nordic American Tankers' 12% Yield Outweighs Recent Earnings Misses

Summary

In my view, NAT's stock is an excellent candidate to be included in a high-yielding stock portfolio.

The company is paying a generous dividend yielding about 12%, and it said that the quarterly dividend payments will continue to be a central part of its strategy.

Although Suezmax tanker rates are declining in the current quarter below $30,000 per day per vessel, it still leaves a considerable margin for the company.

Despite missing estimates in its recent quarterly report, Nordic American Tankers (NYSE:NAT) stock is still very attractive in my opinion. The company generates strong operating cash flow and pays a generous dividend, currently yielding almost 12%.

On February 08, Nordic American Tankers reported its fourth quarter and full year 2015 financial results which missed EPS expectations by $0.09 (66.7%). The tanker posted revenue of $77.4 million in the period, which also missed Street forecasts of $86 million. Nordic missed estimates in the last quarter after showing significant earnings per share surprise in its three previous quarters, as shown in the table below.

According to the company, during 2015 the level of the Suezmax spot tanker market was healthy. Tanker rates achieved on average for the fourth quarter were about $39,800 per day per vessel. In the previous quarter and the same quarter a year ago the spot rates were about $35,000 and $24,000 per day per ship, respectively. Examining the chart below, we can figure out that Suezmax tanker rates are declining in the current quarter below $30,000 per day per vessel. However...


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