FLEX LNG Outlook Bullish on Industry Tailwinds
Industry tailwinds and a multi-decade backlog are two great reasons to put FLNG stock, a liquified natural gas (LNG) marine shipping company, on your radar.
Case in point, natural gas prices have more than tripled since early 2024. Further out, Exxon stated expects global natural gas demand to increase by more than 20% from 2024 to 2050. This big increase in demand will be fueled by growing electricity demand in emerging markets and the transition away from coal. (Source: “Exxon sees natural gas demand surging in outlook to 2050,” Reuters, August 28, 2025.)
This helps explain why American LNG developers have signed sales and purchase agreements for approximately 30 million metric tons in 2025, more than quadruple the number in 2024. (Source: “US LNG producers ink near record contract volumes, even as fees climb,” Reuters, November 6, 2025.)
Part of the reason for the big investment decisions is buyers in Asia and Europe willing to pay a premium to secure LNG from U.S. suppliers while they reduce dependence on Russian gas.
Greater demand for natural gas means greater demand for LNG shipping companies like FLEX LNG Ltd (NYSE:FLNG).
About the Company
FLEX LNG is a marine shipping company focused on the LNG market. Its fleet consists of 13 LNG carriers with an average fleet age of just 5.5 years. It has built up a significant contract backlog, with 11 of its 13 vessels on long-term fixed-rate charter contracts and one vessel on variable hire time charter. (Source: “Company Profile,” FLEX LNG Ltd, January 26, 2026.)
In late 2024, the company strengthened its earnings foundation by securing up to 37 years of new contract backlog for three of its vessels. As a result, its total minimum firm backlog now stands at 53 years. With extensions options, this number could potentially expand to more than 80 years.
A backlog of 56 years to maybe 80+ years obviously provides FLEX LNG, and its shareholders, with strong earnings visibility.
Another Solid Quarter
For the third quarter ended September 30, 2025, FLEX LNG reported vessel operating revenue of $85.7 million, down slightly from $86.0 million in the second quarter of 2025. The average time charter equivalent (TCE) rate was $70,962 per day, down from $72,012 per day in the second quarter. (Source: “Third Quarter 2025 Results Presentation,” FLEX LNG Ltd, November 12, 2025.)
The company’s net income came in at $16.8 million, or $0.31 per share. Adjusted net income was $23.5 million, or $0.43 per share.
FLEX LNG’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) slipped to $61.2 million from $62.6 million in the second quarter. It finished the quarter with, in management’s words, “a robust balance sheet,” with $479.0 million in cash and no debt maturities prior to 2029.
During the quarter, the company completed all four of its planned drydockings on time and within budget. It has three vessels planned for drydocking in 2026.
Quarterly Dividend of $0.75/Share Declared
Thanks to solid earnings, a substantial backlog, and a strong balance sheet, FLEX LNG has been able to provide investors with a reliable dividend payout. (Source: “Dividend,” FLEX LNG Ltd, last accessed January 26, 2026.)
This includes a third-quarter payout of $0.75 per share, or $3.00 per share on an annual basis, for a current forward dividend yield of 11.3%. This represents the 17th consecutive ordinary quarterly dividend payment of $0.75 per share. Again, this payout is supported by the company’s strong financial performance and minimum charter backlog of 53 years.
FLNG Stock Up 20% Over the Last 6 Months
FLNG stock has been a little volatile over the last number of years, though that’s not a big surprise, as these kinds of stocks tend to fluctuate with supply/demand metrics and underlying commodity prices.
Still, FLNG stock continues to do well, hovering near record levels. On January 16, the stock hit a new 52-week high of $27.46. As of January 26, FLNG stock is trading hands at $26.29. This puts it up:
- 8.3% over the last three months
- 20.3% over the last six months
- 5.4% year to date
- 17.5% year over year
Chart courtesy of StockCharts.com
The Lowdown on FLNG Stock
FLEX LNG is a great marine shipping company with a modern fleet of vessels, which should help it take advantage of significantly growing demand for LNG. It has a robust balance sheet, which includes stable cash flows, available capital, and ample liquidity.
The company also has a substantial minimum firm backlog of 53 years, which could grow to 80+ years with charterers’ extension option. This, coupled with strong demand for LNG and an increase in global scrapping activity among older, less efficient vessels all bodes well for longer-term earnings and cash flow growth, which should support a growing dividend as well.