SFL Corporation Stock: Could 11%-Yielder Rise 35%?
November 11, 2025
SFL Stock a Contrarian Play for Economy Bulls
The success of marine shipping companies like SFL Corporation Ltd (NYSE:SFL) ebbs and flows depending in large part on how well the global economy is doing. If, like during the 2020 health crisis, the economy is shut down, shipping stocks perform poorly. When the economy is chugging along, they generally do quite well.
Case in point: during the 2020 health crisis, SFL Corporation stock tumbled more than 55%. Between 2021 and 2024 though, the stock rallied more than 225%, hitting an all-time record high of $12.56 in May 2024.
While SFL Corporation stock gave up some of those big gains to profit-taking, SFL and the broader stock market, took a big hit in early April of this year on concerns about what a trade war would do to the economy.
Sure, the S&P 500 may be at record levels, but those gains are largely a result of the “Magnificent 7” stocks. Remove them from the equation and the S&P 500, while in positive territory, hasn’t moved much in 2025.
While geopolitical risk and policy uncertainty will weigh on the global economy, growth from advanced economies is expected to hit 2.8% in 2025, decelerate to 2.3% in 2026, and then reach 2.6% in 2027. (Source: “Global Economic Prospects,” The World Bank, June 2025.)
These numbers could be revised upwards should the U.S. ink major trade deals. That would certainly benefit marine shipping companies, especially those that are diversified.
For some marine shipping companies, less is more, but for SFL Corporation stock, more is more. Where many other companies specialize in specific industries, like oil and gas or dry bulk, SFL Corporation’s fleet diversity gives it legs through multiple market cycles. (Source: “Q2 2022 Results Presentation,” SFL Corporation Ltd, August 19, 2025.)
SFL Corporation Ltd is an international marine infrastructure company that owns and controls a $4.2-billion portfolio of 60 marine assets. The company’s current portfolio includes 30 container ships, seven car carriers, 18 tankers, two energy vessels, and three dry bulk vessels.
The contract duration on its shipping portfolio consists of:
- 7.3 years for its containers
- 8.0 years for its car carriers
- <1.0 year for its dry bulk ships
- 3.5 years for its offshore vessels (oil rigs)
- 3.6 years for its tankers
This provides the company with stability in both revenue and operating costs. It also helps juice SFL Corporation stock’s reliable high-yield dividend.
Some of its customers include Maersk, Volkswagen, Koch, Trafigura, Phillips 66, and ConocoPhillips.
The company’s fleet size is always in flux as it evolves to meet industry demand. SFL took delivery of two newbuild, long-range product tankers in August and October and the delivery of two chemical tankers in August.
Q2 Earnings Beat with $4.2 Billion in Contracted Backlog
For the second quarter, SFL Corporation reported total operating revenue of $192.6 million and net income of $1.5 million, or $0.01 per share. Wall Street was looking for a second-quarter loss of $0.03 per share. (Source: “Second Quarter 2025 Results,” SFL Corporation Ltd, August 19, 2025.)
The company reported adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $104.0 million from consolidated subsidiaries. Of that, $97.0 million was from shipping and $7.0 million from energy. In addition, $8.0 million in adjusted EBITDA came from associated vessel-owning companies.
During the quarter, SFL received charter hire of $194.0 million, of which 87% was from shipping and 13% from energy. It also announced a five-year time charter extension for three container vessels with Maersk, adding approximately $225.0 million to its backlog from 2026 through 2031.
SFL Corporation currently has $4.2 billion in contracted backlog, providing it and shareholders with visibility in current volatile markets. Of that backlog, more than two-thirds is contracted to investment grade counterparties.
Commenting on the results, Ole B. Hjertaker, the company’s chief executive officer, said, “We have taken decisive steps in recent quarters to strengthen our charter backlog by securing agreements with strong counterparties and deploying high-quality assets. This includes investments in cargo-handling and fuel-efficiency upgrades across our existing fleet, while divesting of older, less efficient vessels.”
86th Consecutive Quarterly Dividend Declared
On the dividend front, since its inception in 2004, SFL Corporation stock has distributed $2.9 billion to shareholders through 86 consecutive quarterly cash dividends. This long history of providing shareholders with a reliable dividend is a testament to management’s ability to renew and diversify SFL Corporation’s portfolio of assets and charters.
That doesn’t mean there won’t be some periods of volatility. Energy prices have been taking a beating, which has hindered employment opportunities for the company’s legacy drilling rig, Hercules.
This has impacted SFL’s near-term financial results. At the same time, the company recently sold and redelivered several vessels. While this has increased its available capital for new investments significantly, it is also reducing near-term cash flow generation.
As a result, SFL Corporation’s board decided to “adjust” (lower) the dividend to $0.20 per share from $0.27 per share a year ago. This translates to SFL Corporation stock providing an annual dividend payout of $0.80 per share for a forward annual dividend yield of 10.77%.
That’s a little higher than the five-year average dividend yield of 9.64% and more than triple the current inflation rate of three percent.
While income investors are no doubt disappointed that management cut the payout this time around, it has actually raised the payout eight times since 2020. The reduction was prudent, and perhaps SFL Corporation stock will resume its payout increases over the coming quarters.
Could SFL Corporation Stock Have 35%+ Upside Potential?
As you can see in the chart below, shareholders were not pleased with the company announcing a reduction in its second-quarter dividend back in August. Over the last couple of weeks though, SFL Corporation stock has rallied approximately seven percent.
According to Wall Street, the recent sell-off is overdone, with analysts providing a 12-month share price target of $10.00. Should SFL Corporation stock hit that level, it would put it at its highest trading level since February of this year.
Chart courtesy of StockCharts.com
The Lowdown on SFL Corporation Stock
SFL Corporation Ltd continues to be a diversified marine shipping company with a highly predictable cash flow. It has a massive fixed revenue backlog of $4.2 billion, two-thirds of which comes from customers with an investment-grade rating.
The company’s outlook for the next 12 months remains robust, with analysts predicting that SFL Corporation stock could rally more than 35% to $10.00. That’s good news to shareholders and the 254 institutions that hold 38.9% of the company’s outstanding shares.
Some of the biggest holders include Dimensional Fund Advisors, BlackRock Inc., The Vanguard Group Inc, and Bank of New York Mellon Corporation. (Source: “SFL Corporation Ltd. (SFL),” Yahoo! Finance, last accessed November 4, 2025.)
