New Trade for August 30th, 2023

The best dividend stocks belong to stable, long-standing companies with a proven track record of sharing profits with their shareholders. This fundamental understanding serves as our backdrop today, as we shift our focus to a company that seamlessly aligns with this criteria. What’s morer, this company holds a distinctive allure due to its standout performance across three key yardsticks:

  • Dividend Payout Ratio: A higher ratio in this context confirms the company’s capacity to generously distribute profits among its investors.
  • Debt-to-Equity Ratio: Here, a lower measurement signifies adept management of its debt portfolio, a key marker of financial robustness.
  • Beta Score: The beta, when under 1.00, establishes the stock’s resilience against the inherent fluctuations of the broader market.

Not only does today’s stock recommendation satisfy each of these parameters, but also presents an appealing entry point at the present moment…

Nordic American Tankers (NAT)

Nordic American operates as an oil tanker company, boasting a fleet of 19 tankers. The company enjoyed an exceptional first half performance, supported by a particularly strong second quarter, when the company reported an average time charter equivalent rate of $39,300 per day per vessel.

Adding to its positive prospects, Nordic American management is confident that there is “a scarcity of [its] type of ships,” resulting in improved outcomes and a higher dividend yield. This optimistic trajectory suggests that NAT stock is likely to sustain its upward trend. Notably, the company’s commitment to robust year-on-year dividend growth further underscores its healthy position.

Despite NAT’s share price increase of 65% in the last 12 months, the stock still trades at an attractive forward P/E ratio of 6.3. Further, NAT stock offers investors a desirable quarterly dividend yield of 9.27% against a sector average of 3.75%.

The company has a solid history of dividend growth, which is backed by a stable 69% payout ratio. A low 0.13 beta score indicates low volatility. What’s more, the company has steadily reduced its debt.  As of March 31st NAT’s debt to equity ratio was 0.55.

NAT has a robust time charter equivalent rate and strong balance sheet, providing high financial flexibility.  It’s no wonder the pros on Wall Street deem the stock a “Strong Buy.”

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