Flex LNG: Set Sail With Natural Gas


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One of the larger secular themes that is playing out now is the rising global demand for liquified natural gas (LNG) to replace coal and Russian LNG to Europe, explains Bryan Perry, editor of Cash Machine.

Flex LNG Ltd. (FLNG) is a pure play on the ocean-going transport of LNG from the United States and other LNG-producing terminals around the world to end markets.

Based in Bermuda under Norwegian management, Flex LNG Ltd. is an LNG shipping company with a fleet of 13 fuel efficient, fifth-generation LNG carriers. The fleet consists of nine M-type, Electronically Controlled, Gas Injection LNG carriers and four Generation X Dual Fuel LNG carriers built between 2018 and 2021. This is a very young fleet by industry standards.

Industry-leading Cheniere Energy (LNG) had exercised its option to employ a fifth Flex LNG carrier under the time charter agreements announced nearly a year ago. Flex announced the Flex Aurora will be the fifth ship to be delivered to Cheniere, commencing its 3.5-year time charter during Q3 2022.

The company is set to flourish in revenue, earnings, and dividend payouts for at least the next three years, offering investors a very visible investment proposition. Flex reported fourth-quarter 2021 results that proved the company is on a powerful uptrend for its business. The next earnings date is expected on May 20.

Flex management declared a $0.75 per share dividend that equates to $3.00/share per year. At its recent price of $28.10 the stock yields around 10.35%, making it an excellent addition to our Extreme Income Portfolio and a strong complement to our high-yield, inflation-sensitive asset mix.

Let’s set sail with this pure play in the LNG space and look for rising dividend payouts and capital appreciation. I would say to buy Flex LNG Ltd. under $32.

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