Flex LNG (Hold, TP: NOK364.00) - Complete yield valuation
Except for a special DPS of USD0.5, the Q2 report contained few surprises. However, as Flex LNG’s fleet has zero open days in 2022 and 2023, due to long-term contracts, shareholders have strong earnings visibility which indicates capacity to maintain the dividend. We believe the market valuation reflects the current dividend capacity, with 8% yield on 2023e DPS equating to NOK364/share, while alternative measures seem far stretched. Thus, we find Flex LNG steering towards a complete dividend yield valuation. We reiterate our HOLD but have raised our target price to NOK364 (282).Flex Lng Limited. FLEX LNG Ltd. is an owner of liquefied natural gas (LNG) carrier vessels and floating storage regasification units (FRSUs). The Company is focused on commercial activity relating to securing hydrocarbon feed stock for floating liquefaction projects, constructing, owning and operating floating liquefaction vessels and/or LNG vessels and sales and marketing of hydrocarbons and business in connection therewith, including investing in other companies. The Company operates a fleet of LNG carriers and has four M-type, Electronically Controlled, Gas Injection (MEGI) LNG carriers with a capacity of approximately 174,000 cubic meters under construction. The Company markets these vessels for charter and is also pursuing FSRU projects. The Company has four modern LNG vessels on short term charter that are being traded in the spot and short term LNGC market. Its subsidiaries include FLEX LNGC 1 Limited, FLEX LNGC 2 Limited, FLEX LNG Shipping Limited and FLEX LNG Management Limited.
DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.
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