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Must-know: An overview of Tsakos Energy Navigation

Part 7
Must-know: An overview of Tsakos Energy Navigation (Part 7 of 7)

Overview: Tsakos’ balanced leverage, liquidity, and valuations

Leverage—liquidity levels

Tsakos (or TNP) has a strong balance sheet with ample liquidity, conservative leverage, and a healthy access to capital. At the end of 2014, the company has maintained a strong balance sheet with $204 million in cash reserves compared to $171.8 million at year end 2013.

Lev RatiosEnlarge Graph

TNP liquidity and leverage position has improved since the 1Q13. Total indebtedness at March 31, 2014, amounted to $1,354 million, some $82 million lower than the March 31, 2013, balance. Tsakos’ net debt to capital was 51% at March 31, 2014, and has fallen further since that date.

Valuations—EV/EBITDA

TNP is currently trading at an enterprise value (or EV) to earnings before interest, taxes, depreciation, and amortization (or EBITDA) (2015E) valuation of 8.95 compared to the current EV to EBITDA of 10.9. The EV to EBITDA (2015E) for DHT Holdings Inc. (DHT), Teekay Tankers Ltd. (TNK), Navios Maritime Acquisition (NNA), and Nordic American Tankers (NAT) stands at 9.76, 10.46, 8.81, and 9.98, respectively. The Guggenheim Shipping ETF (SEA) tracks the shipping companies.

Meanwhile, the EV to EBITDA for the current quarter for DHT, TNK, NNA, and NAT stands at 11.22, 12.66, 9.46, and 15.91, respectively.

Leverage ratios

Compared to the industry average and industry peers, TNP trades at an approximate low level in debt to equity and debt to assets ratio exposing the company to minimal risk and maximizing shareholder returns.

Debt to equity and debt to assets ratio for TNP stands at 123.68 and 53.22, respectively. Meanwhile, DHT Holdings Inc. (DHT), Teekay Tankers Ltd. (TNK), Navios Maritime Acquisition (NNA), and Nordic American Tankers (NAT) record debt to equity of 54.8, 246.2, 252.7, and 29.41, respectively, compared to the industry average of 3,283.02.

The debt to assets ratio of DHT Holdings Inc. (DHT), Teekay Tankers Ltd. (TNK), Navios Maritime Acquisition (NNA), and Nordic American Tankers (NAT) stands at 34.94, 67.49, 69.48, and 21.93, respectively, compared to the industry average of 56.90.

The Guggenheim Shipping ETF (SEA) tracks shipping companies.

 

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