Top Oil Tanker Stocks for Q4 2022

SFL, NVGS, and STNG are the top for value, growth, and momentum, respectively

The oil tanker industry is involved in the transportation and storage of crude oil, natural gas, and related products. Companies in the industry own, operate, or lease various types of oil tankers and facilities. Some of the biggest oil tanker companies include Belgium-based Euronav N.V.; Monaco-based Scorpio Tankers Inc.; and Teekay Corp., which has ownership interests in publicly traded sister companies Teekay Tankers Ltd. and Teekay LNG Partners L.P.

There is no unique benchmark for the oil tanker industry. However, oil tanker stocks may—though not always—exhibit similar performance to companies operating within the broad energy sector. Energy stocks, as represented by the Energy Select Sector SPDR ETF (XLE), have dramatically outperformed the broader market. XLE has provided a total return of 43.5% over the past year, sharply outpacing the Russell 1000’s total return of -17.0%.

Here are the top three oil tanker stocks with the best value, fastest growth, and most momentum. The market performance numbers above and all statistics in the tables below are as of Sept. 29, 2022.

Best Value Oil Tanker Stocks

These are the oil tanker stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Oil Tanker Stocks
  Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio
SFL Corp. Ltd. (SFL) 9.14 1.3 5.5
Frontline Ltd. (FRO) 10.83 2.4 34.9
Navigator Holdings Ltd. (NVGS) 11.09 0.9 692.3

Source: YCharts

  • SFL Corp. Ltd.: SFL Corp. is a Bermuda-based company that owns and operates a fleet of crude oil tankers, bulk and ore vessels, dry bulk carriers, container ships, and jack up oil rigs. The company announced on Sept. 2 that it had agreed to acquire two feeder container vessels with long-term time charters to an unnamed leading European liner company. SFL said that its fixed rate charter backlog will increase by approximately $120 million as a result of the transaction.
  • Frontline Ltd.: Frontline is a Bermuda-based international shipping company. It provides marine transportation of crude oil and oil products with a fleet of roughly 70 vessels.
  • Navigator Holdings Ltd. Navigator Holdings, headquartered in the United Kingdom, owns and operates a fleet of liquified gas carriers. The company also transports liquefied petroleum gas (LPG), petrochemical gases and ammonia. Navigator reported Q2 2022 financial results on Aug. 18. Net income grew nearly 22-fold on a 46.6% increase in revenue growth (YOY). The company reported strong growth across all of its business lines.

Fastest-Growing Oil Tanker Stocks

These are the oil tanker stocks with the highest year-over-year (YOY) sales growth for the most recent quarter. Rising sales can help investors identify companies that are able to grow revenue through organic or new ways, and find growing companies that have not yet reached profitability. In addition, earnings-per-share (EPS) can be significantly influenced by accounting factors that may not reflect the overall strength of the business. However, sales growth can also be potentially misleading about the strength of a business, because growing sales on money-losing businesses can be harmful if the company has no plan to reach profitability.

Fastest-Growing Oil Tanker Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
Navigator Holdings Ltd. (NVGS) 11.09 0.9 1,700 44.6
International Seaways Inc. (INSW) 34.79 1.7 N/A (see company description) 306.4
DHT Holdings Inc. (DHT) 7.54 1.2 1,180 51.5

Source: YCharts

  • Navigator Holdings Ltd.: See above for company description.
  • International Seaways Inc.: International Seaways is a tanker company that provides energy transportation services for crude oil and petroleum products. Through joint ventures, the company also holds ownership interests in floating storage and offloading service vessels. International Seaways does not have an EPS growth figure in the table above because EPS went from negative to positive for the period in question.
  • DHT Holdings Inc.: DHT Holdings is a Bermuda-based crude oil tanker company. It operates a fleet of crude oil tankers with management operations in Monaco, Singapore, and Norway. DHT announced on Sept. 8 that it will institute a new dividend policy. Beginning with the dividend for Q3 2022, 100% of net income will be returned to shareholders in the form of quarterly cash dividends.

Oil Tanker Stocks With the Most Momentum

These are the oil tanker stocks that had the highest total return over the last 12 months.

Oil Tanker Stocks With the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
Scorpio Tankers Inc. (STNG) 41.81 2.5 134.2
Ardmore Shipping Corp. (ASC) 9.08 0.3 125.3
International Seaways inc. (INSW) 34.79 1.7 96.7
Russell 1000 N/A N/A -17.0
Energy Select Sector SPDR ETF (XLE) N/A N/A 43.5

Source: YCharts

  • Scorpio Tankers Inc. : Scorpio Tankers, based in Monaco, is a leading international transporter of refined petroleum products. The company's fleet consists of 131 wholly owned, finance leased or chartered-in tankers.
  • Ardmore Shipping Corp.: Ardmore Shipping is a Bermuda-based company which owns and operates product and chemical tankers. It provides voyage charters, time charters, and commercial pools. On July 27, Ardmore reported Q2 2022 financial results. The company posted net income of $29.7 million compared with a net loss in the prior-year quarter. Net revenues more than doubled YOY. Ardmore said improved market conditions helped to drive growth, including a strengthening of the product tanker market driven by the global energy crisis, supply-demand dislocations, and other factors.
  • International Seaways Inc.: See above for company description.

How Demand and Supply Factors Affect Oil Tanker Stocks

Oil tanker stocks typically benefit when supply outstrips demand, creating more crude to transport and store. For example, the sector posted solid gains during the early stages of the COVID-19 pandemic, when oil demand suddenly plummeted as economic activity reached a standstill. As a result, energy producers and refineries turned to oil tankers for storage solutions, pushing up their share prices.

Reduced demand and excess supply also lower oil prices, resulting in declining bunker fuel costs for oil tanker companies. Lower operational costs help companies in the sector boost their bottom line, which may benefit their share prices. Conversely, high fuel costs can weigh on earnings when oil demand surpasses supply.

Finally, a demand/supply imbalance can benefit oil tanker stocks through contango—a situation where the current oil spot price drops below its future price. This encourages companies to purchase the commodity in the spot market and store it to sell at a later date, hence creating higher demand for transportation and storage.

Risks of Oil Tanker Stocks

Oil Spills: Oil spills can lead to considerable economic losses for oil tanker companies and cause significant reputational damage. Not only could the company responsible for the accident be liable for cleanup and compensation costs, but it would also face a substantial increase in insurance premiums. Perhaps the most infamous oil tanker spill occurred in 1989 when the Exxon Valdez ran aground on Prince William Sound's Bligh Reef in Alaska. The accident cost Exxon Mobil Corporation (XOM) over $5 billion in cleanup costs, fines, penalties, and claims.

Geopolitical Tensions: Oil tanker stocks face potential challenges from geopolitical flare-ups that could disrupt global shipping lanes. For example, in 2019, Iran seized two oil tankers in the strait of Hormuz amid heightened tensions between Tehran and Washington. The incident temporarily disrupted shipping through the waterway, which carries around 19 million barrels of crude and other petroleum products daily. Furthermore, in May 2022, Iran seized two oil tankers in the Persian Gulf, reigniting fears of interruptions to global oil transportation.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or adopt any investment strategy. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

Article Sources
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  1. YCharts. “Financial Data."

  2. SFL Corp. Ltd. "SFL – Acquisition of two newbuild feeder container vessels with long term charters."

  3. Navigator Holdings Ltd. "Navigator Holdings Ltd. Results for the Three and Six Months Ended June 30, 2022."

  4. International Seaways Inc. "International Seaways Reports Second Quarter 2022 Results."

  5. DHT Holdings Inc. "DHT Holdings, Inc. announces 100% of net income as new dividend policy."

  6. Ardmore Shipping Corp. "Ardmore Shipping Corporation Announces Financial Results For The Three Months Ended June 30, 2022."

  7. Barron's. "Oil Tanker Stocks Jump as Storage Crunch Leads to a 'Bonanza' for Ship Owners."

  8. Treehugger. "The Exxon Valdez Oil Spill: History and Impact."

  9. The Guardian. "Iran Stokes Gulf Tensions by Seizing Two British-Linked Oil Tankers."

  10. Reuters. "Iran Seizes Two Greek Tankers Amid Row Over U.S. Oil Grab."

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