Is This Penny Stock Worth a Flier as Commodities Boom?

NAT has long-term chart pressure looming above

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Nordic American Tankers Limited (NYSE:NAT) is an international tanker company. The stock is most well-known for its dividend history. NAT prioritizes giving back to its shareholders by the way of dividends, and has paid one every quarter since 1997. However, the payout amount has fluctuated based on market conditions. In 2020, Nordic American Tankers paid $0.45 in total dividends, $0.10 in 2019, $0.07 in 2018, and $0.53 in 2017. Most recently, NAT paid a $0.02 dividend for the first quarter of 2021, which is equivalent to a forward dividend of $0.08 and a dividend yield of 2.42%.

On the charts, NAT has had an uninspired 12 months, shedding 35% and digging deeper into penny stock territory since its June 8 annual high of $5.40. Recent breakout attempts have been thwarted by the shares' descending 200-day moving average. 

Nordic American Tankers will report earnings next  Monday, May 17. In recent history, NAT outperformed earnings expectations on two out of its four earnings reports for 2020.

For the first quarter of 2020, Nordic American Tankers beat analyst estimates by a margin of $0.02 and reported an earnings per share (EPS) of $0.27. For the second quarter of 2020, the company's EPS increased to $0.33 and beat expectations by a margin of $0.05. For the third quarter of 2020, Nordic American Tankers reported a $0.07 loss that missed estimates by a margin of $0.03. The most recent report was also a loss -- of 19 cents -- that missed expectations by a margin of one penny.

In general, Nordic American Tankers needs to show greater consistency with profitability in order for the stock to make any significant upward moves. In 2020, the company's net income increased by more than $60 million, taking net profits to $50 million. NAT has also increased net income $254 million since 2017.

However, Nordic American Tankers has fallen back into unprofitability over the past two quarters, reporting a net loss of $10 million for Q3 and a net loss of $28.66 million in Q4 of last year. And while the company’s revenues follow a similar pattern and have dipped over the past two quarters, they have maintained an overall upward trajectory over the past few years. With a price-earnings ratio of 9.85, Nordic American Tankers stock has potential to double or triple in price if it can string together a few profitable quarters to boost confidence.

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