Massive Dividend Alert: HAFN Stock Offering 18% Yield with More Upside Ahead
July 8, 2025
Hafnia Stock Offering Attractive Opportunity?
Today, my focus income stock is HAFN stock.
When most people think about shipping companies, they tend to picture giant ships staked with thousands of containers headed to ports around the world. But there’s another side to the global shipping industry that doesn’t get much attention: the transportation of liquid commodities like gasoline, diesel, jet fuel, and chemicals.
This part of the shipping business, called the product tanker market, plays a critical role in keeping the global energy supply chain moving.
Here’s something else you should know: the demand for refined oil products isn’t going anywhere. And, as refineries are often located far away from the users of these products, there’s only one economical and, in many cases, practical way to transport these products across seas: tankers.
One of the most attractive opportunities in this space right now is Hafnia Ltd (NYSE:HAFN).
For an income investor searching for a high yield that’s backed by earnings and a rock-solid balance sheet, HAFN stock could really be worth a look.
What Does Hafnia Do?
Hafnia Ltd is one of the largest product tanker owners and operators in the world. It owns and charters ships that transport refined petroleum products like gasoline, diesel, and jet fuel globally.
The company operates over 200 vessels and generates the bulk of its revenue in the spot market. This essentially means that it charges variable rates based on demand. This gives Hafnia the flexibility to capitalize on high-rate environments, especially during periods of geopolitical instability or amidst supply chain disruptions—like we’ve recently been experiencing. (Source: “About Hafnia,” Hafnia Ltd, last accessed June 30, 2025.)
A Massive Dividend Yield That’s Hard to Ignore
The main attraction with HAFN stock is the dividend yield. It’s massive in an environment where bond yields are low and the dividend aristocrats are yielding in the low single digits.
At the current price, HAFN stock has an eye-popping dividend yield of 18.01%.
This is not a misprint.
Now, anytime a company has a dividend yield of over 10%, income investors must ask: is the dividend safe here?
In the case of HAFN stock, the answer seems to be a solid “yes.”
And why is that?
Well, Hafnia is making money. In the first quarter of 2025, the company reported net profit of $63.2 million, or $0.13 per share. This was driven by strong spot market rates and disciplined cost management. Hafnia’s time charter equivalent (TCE) earnings reached $218.8 million in the first quarter, with an average daily TCE rate of close to 23,000 per day. (Source: “Condensed Consolidated Quarterly Financial Information Q1 2025,” Hafnia Ltd, last accessed June 30, 2025.)
Essentially, this cash flow allows Hafnia to fund its dividend while keeping its balance sheet in good shape.
Balance Sheet Adds Stability
Generally, one of the biggest concerns investors have with high-yield stocks is debt. Typically, when a company pays out this much cash, it’s because it’s taking on leverage to keep shareholders happy.
That’s not the case with Hafnia Ltd.
Hafnia’s net loan-to-value (LTV) ratio in the first quarter of 2025 was 24.1%—a conservative number for the shipping industry. Also, the company’s management has even said previously that if LTV drops below 20%, the company will increase its dividend payout ratio to 90% of earnings.
In other words, Hafnia is willing to pay even more if the balance sheet keeps getting stronger.
This is music to the ears of income investors.
Big Upside Potential with HAFN Stock?
HAFN stock isn’t just a contender for income; there could be massive capital appreciation with this pick as well.
Right now, HAFN stock trades at around $5.00 per share, giving it a market cap of about $2.5 billion. But even Wall Street analysts following the company are projecting significant upside.
Price targets for HAFN stock range from $6.00 on the low end to as high as $10.00, with an average price target of around $8.00. Assuming HAFN just reaches Wall Street analysts’ average price target, this would represent a gain of close to 60%. (Source: “Analysis,” Yahoo! Finance, last accessed June 30, 2025.)
Because analysts are bullish, HAFN stock has the backing of some big institutional investors.
Institutional investors now hold roughly 34% of the company’s outstanding shares, including such major players as The Vanguard Group and Acadian Asset Management. (Source: “Holders,” Yahoo! Finance, last accessed June 30, 2025.)
To say the least, this level of institutional interest shows that smart money sees value here.
Furthermore (and even more encouraging for income investors), insiders own over 45% of the company. That’s a massive vote of confidence from people who know the business inside and out. When management has that much skin in the game, it wouldn’t be wrong to say that they’re motivated to keep delivering results.
Chart Courtesy of StockCharts.com
The Lowdown on HAFN Stock
If you’re an income-focused investor tired of chasing mediocre dividend yields, HAFN stock offers something different: a monster dividend backed by earnings, a disciplined management team, and upside potential.
With HAFN stock, shareholders get:
- An 18% dividend yield
- Strong earnings and cash flow
- Institutional and insider support
- Exposure to the key global shipping market
Are there risks in owning HAFN stock?
Sure. But the risk/reward trade-off with HAFN stock looks skewed heavily in favor of income investors.
