Are we nearing the bottom of the oil tanker market, Cramer asked Monday.
This high-yielding sector hasn’t been doing so well recently because supply is outpacing demand, the "Mad Money" host said. Even Nordic American Tanker , Cramer's fave oil tanker, has been hammered lately. The stock is now flirting with its 52-week low.
Yet Cramer wonders if Nordic American is worth buying at current levels. The Bermuda-based company reported a solid quarter Monday morning, delivering a 1 cent beat with spot rates up 19 percent from the previous quarter. It also declared a 30 cent quarterly dividend, up from 25 cents the prior quarter. If NAT keeps its payout at 30 cents for the rest of the year, Cramer said the stock will yield 5.1 percent. Even if rates stay the same, he thinks it could boost the payout since the company plans to bring on three more ships in 2011.
Nordic American is best positioned to benefit from the depressed market, Cramer said. After all, it can afford to buy new ships from competitors, who are struggling. The company already has 19 mid-sized Suezmax tankers, a clean balance sheet and some of the lowest costs in the industry, Cramer said. Plus, the company’s fleet is on spot rates. So when spot rates for tankers turn around, Cramer thinks it will translate into a higher dividend.
To find out of we are nearing an oil tanker bottom and if there is potential for a higher dividend in the future, Cramer spoke with NAT’s CEO Herbjorn Hannson. Watch the video to see the full interview.
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