The value of Tsakos Energy Navigation has increased by 73% in New York Stock Exchange in the last 12 months.
The company, which has planned a $2 billion investment program to make its fleet more environmentally friendly by 2030, saw its shares rise to more than $31 on Wall Street in June, while a year ago they were below $17. .
According to an analysis by Alan Sumler, from Seeking Alpha, the company is in the process of renewing its fleet of ships with alternative ecological fuels to meet the demands of its customers.
As he highlights, the cost of this process is weighing on the company’s performance in the first quarter, but it expects the third and fourth quarters of 2024 to present even better results.
During 2023, the company announced revenues and performance at record levels. This trend, according to the analyst, will continue as global demand for oil transportation increases. There are also ongoing geopolitical upheavals that are creating new and larger trade routes.
According to the analyst, the company, which trades at US$29.34, is undervalued and trades below its book value of US$56.99 per share and the average target price of US$35 per share.
The company’s share price still has a long way to go and the company, which operates in a cash-rich environment, has promised continued good performance.
Additionally, the company doubled its semi-annual dividend for the year, increasing it to $0.6 per payment.
The market
Referring to market fundamentals, the management of Tsakos Energy Navigation highlights that the energy industry oil tankers is on a strong “trajectory”, driven by a tight balance between supply and demand due to geopolitical tensions.
“With this high fleet renewal activity, combined with the increase in dividends, we are confident that TEN’s share price will continue to strengthen, as it finally reflects its true value” emphasized the president and COO of TEN, George Saroglou.
The fleet
Tsakos Energy Navigation (RTE), interests Dr. Nikos Tsakou aims to expand his tanker fleet with five additional newbuilds ships.
The first half of this year was one of the busiest in TEN’s history, as it was involved in the sale, acquisition and order of 14 ships.
All deals are part of a broader fleet renewal strategy. Following the addition of four ships to the fleet and the sale of a suezmax, during the first quarter, TEN received four more ships and sold two aframaxes, a suezmax and an LNG carrier to third parties, with a significant profit.
Additionally, it is in advanced negotiations with a Far Eastern shipyard to build five LR1 tankers, with deliveries expected between the second quarter of 2027 and the third quarter of 2028.
In total, the listed company has disposed of 0.6 million dwt assets with an average age of 17.5 years in 2024, which it is replacing with environmentally friendly vessels of 1.4 million dwt and an average age of just 1.5 year.
Notably, six alternative fuel-capable ships are already in operation, all on long-term charter to oil giants.
The RTE fleet currently consists of 74 ships, oil tankers, product tankers and LNG Carriersincluding 12 tankers under construction (three DP2 tankers, two Suezmaxes, two MR tankers and five LR1 tankers).