Best Oil Tanker Stocks

Read our Advertiser Disclosure.
Contributor, Benzinga
April 20, 2024

Frontline (NYSE:FRO)

Based in Bermuda, Frontline Ltd is an international shipping company focusing on transporting crude oil and oil derivative products. Frontline’s main fleet consists of 24 crude carriers, plus 20 Aframax and 28 Suezmax tankers. Frontline’s stock has seen volatile trading conditions since the COVID-19 pandemic began, but the company had one of its most profitable years in 2020 with a net yearly income of $412.9 million or $2.09 per diluted share.

In its latest quarter ending March 31, 2021, Frontline’s net income declined 82% and its revenue fell 53%. That decline put pressure on the company’s share price and was partly due to oil production cuts by Russia, Saudi Arabia and the OPEC nations. Frontline stock pays a $2.00 yearly dividend that yields 22.99%, which could make it a good candidate for income investors. At its recent price of $8.56 per share, the stock also qualifies for Benzinga’s stocks under $10 list. It presently has a 6.74 price-to-earnings (P/E) ratio on a trailing 12 month basis (ttm).

$23.10
0.23[1.01%]
Last update: 7:00PM (Delayed 15-Minutes)
Get Real Time Here
Open23.160Close23.100
Vol / Avg.1.296M / 2.086MMkt Cap5.143B
Day Range22.950 - 23.42552 Wk Range13.350 - 25.135

DHT Holdings (NYSE:DHT)

Based in Hamilton, Bermuda, DHT Holdings Inc. provides transport services to the oil industry through its fleet of 27 very large crude carrier (VLCC) ships. The company’s fleet of Aframax and Suezmax ships has a capacity of 8,360,850 deadweight tons. DHT Holdings’ integrated management operates in Norway, Singapore and Monaco. 

DHT’s latest earnings report released on May 4th, 2021 showed the company had an EPS of $0.05 per share, which beat analyst expectations of $0.02 to $0.03 per share. Over the past year, the company also has generated earnings of $1.74 per share, giving it a current P/E ratio (ttm) of 5.25. The stock also pays a $0.16 quarterly dividend that results in a 2.54% yield.

$11.29
0.23[2.08%]
Last update: 4:31PM (Delayed 15-Minutes)
Get Real Time Here
Open11.070Close11.260
Vol / Avg.1.286M / 1.714MMkt Cap1.821B
Day Range11.035 - 11.29552 Wk Range7.300 - 11.955

Nordic American Tankers (NYSE:NAT)

Also based in Hamilton, Bermuda, Nordic American Tanker Ltd was originally known as Nordic American Tanker Shipping Ltd until it changed its name in June 2011. The company operates a homogenous fleet of 33 Suezmax tanker ships that the company charters and leases internationally. Nordic American had an extremely rough 2021 thus far that saw the company operate with a negative cash flow that cost the oil shipper $20 million in its 1st quarter. 

NAT stock currently trades at $3.00 per share and could appreciate with a recovery in the sector, although some countries have cut oil production levels since demand has been less than expected. Additionally, Nordic American’s cash levels have decreased significantly, leading some analysts to question the company’s long-term solvency. At current levels, NAT stock qualifies for Benzinga’s penny stocks under $5 list.

$3.83
0.06[1.59%]
Last update: 7:33PM (Delayed 15-Minutes)
Get Real Time Here
Open3.760Close3.800
Vol / Avg.2.017M / 2.888MMkt Cap799.690M
Day Range3.740 - 3.84552 Wk Range3.260 - 4.830

Euronav (NYSE:EURN)

Antwerp, Belgium-based Euronav is an oil tanker company that also runs the world’s largest independent quoted crude tanker platform. This software allows users to access services like fleet management, protection management and operational management.

The company’s vast fleet consists of 65 VLCC and Suezmax floating, storage and offloading vessels (FSOs) that the company leases through its headquarters in Antwerp and its offices throughout Europe and Asia. The company’s latest earnings report was released on May 6th, 2021, and showed EPS of $0.35 on $92.24 million in revenue. EURN stock pays a $0.03 quarterly dividend, and the stock currently trades at the $9 level with a P/E (ttm) of 12.83. 

$16.15
-0.22[-1.34%]
Last update: 9:29AM (Delayed 15-Minutes)
Get Real Time Here
Open16.150Close16.350
Vol / Avg.247.836K / 1.391MMkt Cap3.137B
Day Range16.112 - 16.41052 Wk Range14.100 - 18.505

Teekay (NYSE:TK)

Teekay Corp is engaged in providing crude oil and gas marine transportation services. It also offers offshore oil production, storage, and offloading services, primarily under long-term, fixed-rate contracts. The company has three primary lines of business: offshore production (FPSO units), liquefied gas carriers (LNG and LPG carriers), and conventional tankers. It manages these businesses for the benefit of all stakeholders. The company serves energy and utility companies, oil traders, large oil and LNG consumers, petroleum product producers, government agencies, and various other entities that depend upon marine transportation.

$7.29
0.23[3.26%]
Last update: 6:36PM (Delayed 15-Minutes)
Get Real Time Here
Open7.070Close7.260
Vol / Avg.506.849K / 669.415KMkt Cap665.577M
Day Range7.020 - 7.26552 Wk Range5.010 - 9.275

Oil tankers are ships designed for transporting bulk oil and/or its derivative products. Tanker ships can be either crude tankers that transport unrefined crude oil or product tankers that transport refined products from refineries to consumer markets. Oil tanker stocks provide investors access to companies that own, operate and/or lease different types of oil tankers and supporting facilities.

Global oil demand decreased from 60 to 70 million barrels per day (BPD) to 30 million BPD due to the COVID-19 pandemic. Despite that, oil tanker companies saw increased interest in services during the pandemic because oil producers relied on these companies to store oil in the tankers until the oil market improved. Oil sales have since increased somewhat, prompting the rental price for oil tankers to fall from a high of up to $200,000 per day during the pandemic to more normal levels of $25,000 to $40,000 per day.

Benzinga’s picks for the best oil tanker stocks include those of the largest oil tanker shipping companies in the world. These companies’ stocks trade on major U.S. exchanges, such as the New York Stock Exchange (NYSE) and the Nasdaq Exchange (NASDAQ). 

Quick Look at the Best Oil Tanker Stocks

Overview

Crude oil transportation began in the 1860s when the commodity had to be transported from its source to refineries. Product movement was generally accomplished via the railway system and later through iron and steel pipelines. 

Tanker trucks were more widely used by the 1940s, but oil tanker ships began to dominate the oil transport market as the oil industry expanded and oil was imported from other countries. Full-sized oil tankers can transport a large amount of crude and petroleum products for a very low cost per barrel and are basically the only practical way to transport crude oil across oceans. 

While oil tankers provide the oil industry with transportation and storage capacity, oil tankers carry risk, as evidenced by the massive Exxon Valdez oil spill in 1989 that caused notable environmental harm. The Exxon Valdez ran aground in Prince William Sound and released nearly 11 million gallons of crude oil into the nearby waters that then spread some 1,300 miles along the Alaskan coast. 

The oil tanker business can also see fluctuating demand for its services due to the notable price changes seen in the associated crude oil market. Also, the likelihood that demand for oil will decline as electric vehicle sales rise means that buying oil tanker stocks may not be an optimal choice for long-term investors, although short-term traders who keep a sharp eye on oil prices could do well trading these stocks. 

Income investors who prefer to put their money into dividend stocks could also benefit from owning these stocks. Depending on market forces, however, they may not achieve significant capital appreciation in the price of their oil tanker stock holdings and might even see the price of those stocks decline.   

Best Online Brokers for Oil Tanker Stocks

Benzinga’s selected oil tanker stocks all trade on major U.S. exchanges, so you can trade them through any stock broker providing access to those markets. Most major U.S. brokers will also execute commission-free orders in these stocks. The table below provides a comparison of online brokers you can use to trade these stocks. 

Features to Look for in Oil Tanker Stocks

  1. Fleet Size: The number and size of oil shipping vessels and the types of products transported have a direct bearing on the bottom line of each oil tanker company. Also important are the maintenance costs and potential liabilities the company might incur if the ships are inactive or fall into a state of disrepair. 
  2. Fundamentals: An oil tanker company’s financial statements and quarterly earnings reports can give insight into how viable the company would be as an investment. The company’s earnings per share (EPS), its price-to-earnings ratio and its dividend directly relate to its stock price. 
  3. Leases and Contracts: Oil tanker companies’ leases and contracts are generally made with oil producers and refiners located in various countries around the world. Geopolitical events in those countries could be important factors that might directly affect the company’s bottom line and stock price. 

Are Oil Tanker Stocks a Good Investment?

The short answer to this question is probably not. The oil business and global dependence on fossil fuels for energy are gradually ending as newer and more environmentally sustainable technologies increasingly replace oil as an energy source. The oil tanker stocks listed above also produced dismal long-term results for investors in recent years, an example being NAT which saw a decline of 85% over the past decade. Although these stocks may not be a good long-term investment, they can make an interesting vehicle for short-term speculation and day trading due to their volatility.

About Jay and Julie Hawk

Jay and Julie Hawk are a married financial writing and authorship team who co-founded TheFXperts, a notable financial writing services provider. The Hawks each worked professionally in the financial markets and have more than 40 years of trading experience among them. Together, they write books, trade forex online for their own account and others, mentor traders, and have worked actively as professional freelance writers specializing in financial topics for over 15 years.