| Snowflake Score | |
|---|---|
| Valuation | 6/6 |
| Future Growth | 1/6 |
| Past Performance | 1/6 |
| Financial Health | 1/6 |
| Dividends | 3/6 |
SFL Stock Overview
SFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters.
SFL Competitors
Price History & Performance
| Historical stock prices | |
|---|---|
| Current Share Price | US$9.14 |
| 52 Week High | US$11.60 |
| 52 Week Low | US$7.64 |
| Beta | 0.78 |
| 1 Month Change | -15.14% |
| 3 Month Change | -2.87% |
| 1 Year Change | 9.07% |
| 3 Year Change | -34.71% |
| 5 Year Change | -37.82% |
| Change since IPO | -24.46% |
Recent News & Updates
SFL Corporation: Great Company To Own At A Lower Price
Summary SFL has held up very well in 2022 just as trade transportation looks to weaken materially. Does the FedEx warning mean bad times for marine shipping? Does it even matter when SFL isn't listed in the correct market sector? One of the least understood stocks should weather the recession from an operating perspective even as misperceptions threaten the stock price. We booked profits by selling all our SFL today at better than $9.30 per share for NLY.PF. We rate SFL a buy at $6.50 or lower. The shipping industry has performed well through most of the Pandemic for shareholder returns. Whether air, ground or sea, volume and demand soared. Even horrible bottlenecks at many of the world's ports couldn't back off demand. Fed Ex's announcement that shipping volumes are dropping quickly may be the "canary in the coalmine" for a global trade recession. Threats are mounting for ship lessors. How is SFL (SFL) positioned to ride this next phase of the economic cycle when it isn't even listed in the correct sector and the market doesn't understand its cash flows? Does it matter if everything in transportation gets whacked anyway? Maybe. But first let's clear up the misinformation: Because SFL started 100% servicing the oil and gas sector, it is listed as "Oil and Gas Transportation" rather than as "Marine". Today, oil tanker revenues comprise only 20% of SFL's business. Despite this, SFL stock still moves with energy. SFL has many sale leases, which run entirely through the balance sheet so that EBITDA has to be adjusted to understand true cash flows. Otherwise, SFL looks terrible. Investment Thesis SFL is a completely misunderstood company with solid management, strong contract revenues, and smart financing in a market about to undergo turmoil. From a revenue perspective, SFL inflows are predominantly tied to long term charters (90% of future revenues) where lessees assume all the maintenance costs. That predictable income stream with a variety of large lessees creates greater revenue and profit certainty. The remaining 10% of the fleet is rented out pending longer term leases, disposals or trades. These volatile cash flows move with the charter/hire market. SFL funds its ships through a combination of equity and long-term debt that is further hedged through swap transactions. From 2023 to 2026, less than 10% of debt comes due each year, reducing refinancing risk. We do not see material risk in the financing stack. Shipping Industry Shipping, notoriously volatile because there are long lead times to build ships, would normally expect a flood of new boats over the next 5 years after the volume surge we've experienced. That is not happening. COVID-19 uncertainty meant shipbuilders missed the volume explosion, which will turn out to be a blessing in disguise. Despite Asian shipbuilders working to increase new ship build growth, the waning global economy is keeping ship inventory in check. Retrofits for greater energy efficiency is expected to be a growth area given the lack of new builds and the need for greater energy efficiency within existing fleets. SFL Lessee Quality We already see SFL has laddered its debts well and is not facing a flood of new ships coming into the market. What about credit quality among the lessees in the global recession? SFL Lessees (SFL 2022 Q2 Investor Presentation) This is a far stronger and more diversified list than a decade ago when Frontline and Seadrill dominated this once oil focused lessor. It's hard to fault this list which represents 90% of SFL revenues as follows: SFL Contract Revenues (SFL 2022 Q2 Investor Presentation) If you are looking for a stable, credit-worthy lessee list, this is competitive. Major shipping players plus large direct industrial clients really tells the SFL makeover story. Multiple Valuation We can see that SFL makes an interesting and very overlooked recession investment. What is its relative value to a peer group and where are the good entry points to own the stock? To take a closer look, we have selected a peer group that represents oil and gas transportation in DHT Holdings (DHT) and Teekay Tankers (TNK) as well as container/bulk oriented competitors in Star Bulk Carriers (SBLK), Costamare (CMRE), and Golden Ocean Group (GOGL). Ticker Sector Yield ('TTM') Payout Ratio EV/ EBITDA ('TTM') EBITDA Growth 3YR CAGR EBITDA Margin L-T Debt/ Total Capital SFL Container + Energy 8.77% 63.93% 8.39x 9.22% 69.71% 47.13% DHT Energy 1.20 -25.93 23.35 -25.05 23.51 29.91 TNK Energy 0.00 0.00 34.75 -36.85 6.33 36.27 SBLK Container 34.37 73.84 2.71 72.78 65.04 34.87 CMRE Container 4.87 13.69 4.69 38.91 65.94 51.36 GOGL Container 34.42 90.10 3.72 52.57 56.93 37.13 Source: SA So much going on here. Numbers clearly break between energy and container/bulk shipping. We can see how SFL is somewhere betwixt and between. Let's dive deeper. Within our Container/Bulk peers, Star Bulk and Golden Ocean operate most of their ships in addition to owning and leasing ships, which is reflected in their rich cash flows. Costamare is our most direct comparison with respect to operations. What stands out here are the far higher EBITDA margins, payout ratios and lower enterprise value/EBITDA multiples in the container/bulk sector. For the energy sector, we see far more challenging returns on far thinner margins. For the ship leasing industry, an EV/EBITDA multiple is appropriate. Even though this company leases assets, tangible book value does not help us when the secondary market for ships is fairly volatile. We would need some sort of NAV estimate, which is not available to us. Our energy sector average multiple is 29.05x while the container/bulk average multiple is 3.69x. If we weight these by SFL's product mix of 20% energy, we get a weighted multiple of 8.76x, or almost slightly higher than its price today. But we don't feel confident with only one value measure. Let's look from a dividend income perspective to triangulate better. Income Valuation As we consider the payout ratios each dividend paying peer uses, we judge SFL, SBLK and CMRE to have sustainable policies going forward. DHT and TNK are not relevant since one is not paying a dividend and the other has experienced losses. To establish some patterns, we look at the last ten years to give us some sense for predictability among SFL, SBLK and CMRE. Ticker Revenue Growth Rate (10 yrs.) EBITDA Growth Rate (10 yrs.) Dividend Growth Rate (10 yrs) SFL 8.9% 4.76% -7.97% SBLK 32.40 40.44 Started dividends in 2021 CMRE 7.47 8.38 -8.38 Source: SA None of these has a solid dividend paying track record. Two have shrunk their dividends while SBLK just started to pay after experiencing record cash flows due to the COVID-19 Pandemic. Star is also far riskier because it operates as well as owns the ships.
SFL (NYSE:SFL) Is Experiencing Growth In Returns On Capital
Did you know there are some financial metrics that can provide clues of a potential multi-bagger? In a perfect world...
SFL goes ex-dividend tomorrow
SFL (NYSE:SFL) declared $0.23/share quarterly dividend, 4.5% increase from prior dividend of $0.22. Payable Sept. 29; for shareholders of record Sept. 15; ex-div Sept. 14. See SFL Dividend Scorecard, Yield Chart, & Dividend Growth.
SFL (NYSE:SFL) Has A Somewhat Strained Balance Sheet
Legendary fund manager Li Lu (who Charlie Munger backed) once said, 'The biggest investment risk is not the volatility...
Shareholder Returns
| SFL | US Oil and Gas | US Market | |
|---|---|---|---|
| 7D | -9.3% | -4.0% | -3.1% |
| 1Y | 9.1% | 36.6% | -21.5% |
Return vs Industry: SFL underperformed the US Oil and Gas industry which returned 35.9% over the past year.
Return vs Market: SFL exceeded the US Market which returned -20.3% over the past year.
Price Volatility
| SFL volatility | |
|---|---|
| SFL Average Weekly Movement | 4.4% |
| Oil and Gas Industry Average Movement | 8.1% |
| Market Average Movement | 6.9% |
| 10% most volatile stocks in US Market | 15.7% |
| 10% least volatile stocks in US Market | 2.8% |
Stable Share Price: SFL is not significantly more volatile than the rest of US stocks over the past 3 months, typically moving +/- 4% a week.
Volatility Over Time: SFL's weekly volatility (4%) has been stable over the past year.
About the Company
| Founded | Employees | CEO | Website |
|---|---|---|---|
| 2003 | 18 | Ole Hjertaker | https://www.sflcorp.com |
SFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters. The company is also involved in the charter, purchase, and sale of assets. In addition, it operates in various sectors of the maritime, and shipping and offshore industries, including oil, chemical, oil product, container, and car transportation, as well as dry bulk shipments and drilling rigs.
SFL Fundamentals Summary
| SFL fundamental statistics | |
|---|---|
| Market Cap | US$1.16b |
| Earnings (TTM) | US$217.76m |
| Revenue (TTM) | US$587.97m |
5.3x
P/E Ratio2.0x
P/S RatioIs SFL overvalued?
See Fair Value and valuation analysisEarnings & Revenue
| SFL income statement (TTM) | |
|---|---|
| Revenue | US$587.97m |
| Cost of Revenue | US$168.21m |
| Gross Profit | US$419.76m |
| Other Expenses | US$202.00m |
| Earnings | US$217.76m |
Last Reported Earnings
Jun 30, 2022
Next Earnings Date
Nov 30, 2022
| Earnings per share (EPS) | 1.72 |
| Gross Margin | 71.39% |
| Net Profit Margin | 37.04% |
| Debt/Equity Ratio | 188.4% |
How did SFL perform over the long term?
See historical performance and comparisonDividends
10.1%
Current Dividend Yield48%
Payout RatioValuation
Is SFL undervalued compared to its fair value, analyst forecasts and its price relative to the market?
Valuation Score
6/6Valuation Score 6/6
Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast
Key Valuation Metric
Which metric is best to use when looking at relative valuation for SFL?
Other financial metrics that can be useful for relative valuation.
| What is SFL's n/a Ratio? | |
|---|---|
| n/a Ratio | 0x |
| n/a | n/a |
| Market Cap | US$1.16b |
| Key Statistics | |
|---|---|
| Enterprise Value/Revenue | 5.8x |
| Enterprise Value/EBITDA | 8.3x |
| PEG Ratio | -15.9x |
Price to Earnings Ratio vs Peers
How does SFL's PE Ratio compare to its peers?
| SFL PE Ratio vs Peers |
|---|
| Company | PE | Estimated Growth | Market Cap |
|---|---|---|---|
| Peer Average | 52.6x | ||
PBFX PBF Logistics | 7.6x | 0.5% | US$1.2b |
GLP Global Partners | 3.7x | -57.5% | US$853.4m |
BROG Brooge Energy | 76.7x | n/a | US$926.0m |
NVGS Navigator Holdings | 122.1x | 28.7% | US$856.9m |
SFL SFL | 5.3x | -0.3% | US$1.2b |
Price-To-Earnings vs Peers: SFL is good value based on its Price-To-Earnings Ratio (5.3x) compared to the peer average (52.6x).
Price to Earnings Ratio vs Industry
How does SFL's PE Ratio compare vs other companies in the US Oil and Gas Industry?
Price-To-Earnings vs Industry: SFL is good value based on its Price-To-Earnings Ratio (5.3x) compared to the US Oil and Gas industry average (8.7x)
Price to Earnings Ratio vs Fair Ratio
What is SFL's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.
| Fair Ratio | |
|---|---|
| Current PE Ratio | 5.3x |
| Fair PE Ratio | 13.1x |
Price-To-Earnings vs Fair Ratio: SFL is good value based on its Price-To-Earnings Ratio (5.3x) compared to the estimated Fair Price-To-Earnings Ratio (13.1x).
Share Price vs Fair Value
What is the Fair Price of SFL when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.
Below Fair Value: SFL ($9.14) is trading below our estimate of fair value ($78.56)
Significantly Below Fair Value: SFL is trading below fair value by more than 20%.
Analyst Price Targets
What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?
Analyst Forecast: Target price is more than 20% higher than the current share price and analysts are within a statistically confident range of agreement.
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Future Growth
How is SFL forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?
Future Growth Score
1/6Future Growth Score 1/6
Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE
-0.3%
Forecasted annual earnings growth
Earnings and Revenue Growth Forecasts
Analyst Future Growth Forecasts
Earnings vs Savings Rate: SFL's earnings are forecast to decline over the next 3 years (-0.3% per year).
Earnings vs Market: SFL's earnings are forecast to decline over the next 3 years (-0.3% per year).
High Growth Earnings: SFL's earnings are forecast to decline over the next 3 years.
Revenue vs Market: SFL's revenue (11.4% per year) is forecast to grow faster than the US market (7.7% per year).
High Growth Revenue: SFL's revenue (11.4% per year) is forecast to grow slower than 20% per year.
Earnings per Share Growth Forecasts
Future Return on Equity
Future ROE: SFL's Return on Equity is forecast to be low in 3 years time (15.2%).
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Past Performance
How has SFL performed over the past 5 years?
Past Performance Score
1/6Past Performance Score 1/6
Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE
-15.3%
Historical annual earnings growth
Earnings and Revenue History
Quality Earnings: SFL has a high level of non-cash earnings.
Growing Profit Margin: SFL became profitable in the past.
Past Earnings Growth Analysis
Earnings Trend: SFL's earnings have declined by 15.3% per year over the past 5 years.
Accelerating Growth: SFL has become profitable in the last year, making the earnings growth rate difficult to compare to its 5-year average.
Earnings vs Industry: SFL has become profitable in the last year, making it difficult to compare its past year earnings growth to the Oil and Gas industry (184.6%).
Return on Equity
High ROE: Whilst SFL's Return on Equity (20.81%) is high, this metric is skewed due to their high level of debt.
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Financial Health
How is SFL's financial position?
Financial Health Score
1/6Financial Health Score 1/6
Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage
Financial Position Analysis
Short Term Liabilities: SFL's short term assets ($331.0M) do not cover its short term liabilities ($860.2M).
Long Term Liabilities: SFL's short term assets ($331.0M) do not cover its long term liabilities ($1.7B).
Debt to Equity History and Analysis
Debt Level: SFL's net debt to equity ratio (166.1%) is considered high.
Reducing Debt: SFL's debt to equity ratio has increased from 160.2% to 188.4% over the past 5 years.
Debt Coverage: SFL's debt is not well covered by operating cash flow (17%).
Interest Coverage: SFL's interest payments on its debt are well covered by EBIT (3.1x coverage).
Balance Sheet
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Dividend
What is SFL current dividend yield, its reliability and sustainability?
Dividend Score
3/6Dividend Score 3/6
Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage
10.07%
Current Dividend Yield
Dividend Yield vs Market
| SFL Dividend Yield vs Market |
|---|
| Segment | Dividend Yield |
|---|---|
| Company (SFL) | 10.1% |
| Market Bottom 25% (US) | 1.7% |
| Market Top 25% (US) | 4.7% |
| Industry Average (Oil and Gas) | 5.0% |
| Analyst forecast in 3 Years (SFL) | 10.9% |
Notable Dividend: SFL's dividend (10.07%) is higher than the bottom 25% of dividend payers in the US market (1.64%).
High Dividend: SFL's dividend (10.07%) is in the top 25% of dividend payers in the US market (4.61%)
Stability and Growth of Payments
Stable Dividend: SFL's dividend payments have been volatile in the past 10 years.
Growing Dividend: SFL's dividend payments have fallen over the past 10 years.
Earnings Payout to Shareholders
Earnings Coverage: With its reasonably low payout ratio (48.3%), SFL's dividend payments are well covered by earnings.
Cash Payout to Shareholders
Cash Flow Coverage: SFL is paying a dividend but the company has no free cash flows.
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Management
How experienced are the management team and are they aligned to shareholders interests?
3.7yrs
Average management tenure
CEO
Ole Hjertaker (55 yo)
2.92yrs
Tenure
Mr. Ole Bjarte Hjertaker serves as Director of Frontline Ltd. since May 2022. Mr. Hjertaker serves as Director of SFL Corporation Ltd.since October 28, 2019. Mr. Hjertaker has been the Chief Executive Off...
Leadership Team
Experienced Management: SFL's management team is considered experienced (3.7 years average tenure).
Board Members
Experienced Board: SFL's board of directors are considered experienced (3.5 years average tenure).
Ownership
Who are the major shareholders and have insiders been buying or selling?
Insider Trading Volume
Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.
Ownership Breakdown
| Owner Type | Number of Shares | Ownership Percentage |
|---|---|---|
| Individual Insiders | 91,840 | 0.07% |
| Private Companies | 25,728,687 | 20.3% |
| General Public | 46,071,287 | 36.3% |
| Institutions | 54,893,731 | 43.3% |
Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.
Top Shareholders
| Ownership | Name | Shares | Current Value | Change % | Portfolio % | |
|---|---|---|---|---|---|---|
| 25,728,687 | $235.2m | 0% | no data | |||
| 8,000,000 | $73.1m | 0% | 0.28% | |||
| 6,281,246 | $57.4m | 11.95% | 0.01% | |||
| 5,879,908 | $53.7m | -5.66% | no data | |||
| 2,134,345 | $19.5m | 36.4% | no data | |||
| 2,038,457 | $18.6m | 2.39% | no data | |||
| 1,980,895 | $18.1m | -3.2% | no data | |||
| 1,806,492 | $16.5m | 122.75% | 0.02% | |||
| 1,736,702 | $15.9m | 12.94% | 0.02% | |||
| 1,627,045 | $14.9m | 18.21% | 0.02% | |||
| 1,438,098 | $13.1m | -2.01% | 0.11% | |||
| 1,252,933 | $11.5m | -38.13% | no data | |||
| 1,134,551 | $10.4m | 6.7% | no data | |||
| 1,091,542 | $10.0m | 0% | no data | |||
| 1,056,797 | $9.7m | 3.87% | no data | |||
| 975,175 | $8.9m | 118.92% | 0.02% | |||
| 954,995 | $8.7m | -6.32% | no data | |||
| 939,812 | $8.6m | 0% | 0.2% | |||
| 935,400 | $8.5m | 71.7% | 0.03% | |||
| 818,602 | $7.5m | -7.41% | no data | |||
| 818,367 | $7.5m | 29.58% | 0.01% | |||
| 779,326 | $7.1m | 0% | 0.89% | |||
| 685,657 | $6.3m | 25.85% | no data | |||
| 586,430 | $5.4m | 20.94% | 0.01% | |||
| 570,700 | $5.2m | 120.43% | 0.03% |
Company Information
SFL Corporation Ltd.'s employee growth, exchange listings and data sources
Key Information
- Name: SFL Corporation Ltd.
- Ticker: SFL
- Exchange: NYSE
- Founded: 2003
- Industry: Oil and Gas Storage and Transportation
- Sector: Energy
- Implied Market Cap: US$1.159b
- Shares outstanding: 126.79m
- Website: https://www.sflcorp.com
Number of Employees
Location
- SFL Corporation Ltd.
- Par-la-Ville Place
- 14 Par-la-Ville Road
- Hamilton
- HM 08
- Bermuda
Listings
| Ticker | Exchange | Primary Security | Security Type | Country | Currency | Listed on |
|---|---|---|---|---|---|---|
| SFL | NYSE (New York Stock Exchange) | Yes | Common Shares | US | USD | Jun 2004 |
| UG6 | DB (Deutsche Boerse AG) | Yes | Common Shares | DE | EUR | Jun 2004 |
Company Analysis and Financial Data Status
| Data | Last Updated (UTC time) |
|---|---|
| Company Analysis | 2022/09/29 00:00 |
| End of Day Share Price | 2022/09/29 00:00 |
| Earnings | 2022/06/30 |
| Annual Earnings | 2021/12/31 |
Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.