Nordic American Tankers Ltd: Shares of 10%-Yielder up 17% in 2025
August 11, 2025
Nordic American Announces 111th Consecutive Dividend
Despite calls to the contrary, the U.S. economy continues to chug along. Consumer spending remains resilient, second-quarter gross domestic product (GDP) surprised to the upside, and U.S. jobs data remains robust. All of this suggests that the U.S. will, once again, avoid a recession…and that the economy will remain resilient in the back half of the year.
This optimism has helped energize the stock market to record levels, which is a bit surprising. Back in early April, stocks cratered on concerns about what a global trade war could do to the economy. Not much, it seems.
This has helped energize stocks that have faced tariff headwinds, including Nordic American Tankers Ltd (NYSE:NAT).
Bermuda-based Nordic American Tankers Ltd acquires and charters double-hull tankers. It currently operates a fleet of 20 Suezmax crude oil tankers, with a cargo lifting capacity of one million barrels of oil each. Of that total, 14 vessels are currently in the spot market. (Source: “Overview,” Nordic American Tankers Ltd, last accessed July 31, 2025.)
Suezmax tankers are a medium-sized oil tanker, larger than Aframax but smaller than a Very Large Crude Carrier (VLCC). They are the largest ship that can transit the Suez Canal, the artificial waterway that connects the Mediterranean Sea with the Red Sea.
Suezmax tankers are around 900 feet long and have a capacity of 120,000 to 200,000 deadweight tonnage (dwt). As an oil tanker, this means they can carry 800,000 to more than one million barrels of oil. They are also primarily used on long-haul routes; like a trip from Saudi Arabia to the U.S.
Nordic American Tankers is getting bigger, too. It recently acquired another Suezmax tanker and agreed to acquire a sister vessel from the same owners. Both vessels are fully financed and will provide additional earnings and dividend capacity. Following these transactions, Nordic American’s fleet will consist of 21 Suezmax tankers. (Source: “Nordic American Tankers Ltd (NYSE: NAT) – The NAT fleet is expanding, providing room for continued dividend payments,” Nordic American Tankers Ltd, March 14, 2025.)
Going forward, management said it will continue to buy ships and sell a few units.
Nordic American Tankers Ltd: Q1 Earnings Beat
For the first quarter ended March 31, 2025, Nordic American Tankers reported net voyage revenue of $37.9 million, down from $46.4 million in the fourth quarter of 2024. (Source: “Form 6-K,” U.S. Securities Exchange Commission, June 4, 2025.)
The average time charter equivalent (TCE) for the company’s time charter and spot fleet for the first quarter was $24,714 per day per ship. The operating costs are $9,000 per unit.
Nordic American Tankers’ first-quarter net income was $4.2 million, or $0.02 per share, up from the previous quarter’s net income of $1.3 million, or $0.01 per share. Net operating income was up 24% over the fourth quarter at $10.8 million.
The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter of 2025 were $14.9 million, down from $22.1 million in the previous quarter.
111th Consecutive Dividend
Dividends are an important part of Nordic American Tanker Ltd’s identity. In its financial results, the company states that “whatever we do, dividends remain an important objective.
And they do.
Nordic American Tankers’ policy is to declare quarterly dividends to shareholders, based on its net operating cash flow during the previous quarter. This results in a variable quarterly dividend.
In the first quarter, the company declared a second-quarter dividend of $0.07 per share, its 111th consecutive quarterly dividend. This is up 16.6% from the $0.06 per share paid out in the first quarter. (Source: “Dividends,” Nordic American Tankers Ltd, last accessed July 31, 2025.)
Nordic American Tankers’ current annual payout is $0.29 per share, for a current forward dividend yield of 10.4%.
Does NAT Stock Have 79% Upside?
NAT stock was volatile in the opening months of 2025, looking for some guidance. In early April, it tumbled on concerns about a global trade war. Since then, though, solid economic data, investor optimism, and trade deals have helped juice stocks.
Since bottoming in early April, NAT has advanced 34.7%. The stock is also up 11.8% over the last three months and 17.3% year to date.
However, it’s not all good news: NAT is down 17.5% on an annual basis.
The outlook for the stock is a little more bullish, with conservative Wall Street analysts providing a 12-month share price target range of $3.50 to $5.00. This points to potential upside of 25.5% to 79.2%.
Hitting $5.00 per share would put NAT at its highest trading level since 2017. There’s still room for growth though. The stock hit a record high of $11.13 per share in May 2009.
Chart courtesy of StockCharts.com
The Lowdown on Nordic American Tankers Ltd
Nordic American Tankers Ltd is an oil & gas midstream company that owns one of the largest fleets of Suezmax tankers in the world, boasting long-term contracts with major oil companies.
The company has been expanding its fleet and is, it claims, in a strong position and experiencing one of the most active periods in years. This is due in part to the fact that the available shipyard capacity for large oil tankers is low, leaving limited capacity to build additional Suezmax tankers over the next few years.
This should result in Nordic American continuing to pay income investors one of the best dividend policies in the midstream sector.
