Editor's note: Seeking Alpha is proud to welcome Fausto Cuesta as a new contributing analyst. You can become one too! Share your best investment idea by submitting your article for review to our editors. Get published, earn money, and unlock exclusive SA Premium access.I am a financial analyst with a strong foundation in investment research and a particular focus on the global shipping industry. I entered the world of investing during my university studies, when I was completing my degree in Business Admini ...

Core Viewpoint - SFL Corporation Ltd. is set to release its preliminary financial results for Q4 2025 on February 11, 2026, and will host a conference call and webcast for stakeholders on the same day [1]. Group 1: Financial Results and Events - The preliminary financial results for Q4 2025 will be announced on February 11, 2026 [1]. - A conference call and webcast will take place on February 11, 2026, at 10:00 AM (EST) / 4:00 PM (CET) [1]. - Relevant materials will be available on the Company's Investor Relations section of its website on the same day [1]. Group 2: Participation Details - Stakeholders can join the conference call in listen-only mode via the webcast link on the Company's website [2]. - Participants can also join the live Q&A session through Zoom, with specific meeting ID and passcode provided [2]. - A replay of the conference call will be accessible via the webcast on SFL's website [2]. Group 3: Company Overview - SFL Corporation Ltd. has a strong track record in the maritime industry, having paid dividends every quarter since its NYSE listing in 2004 [3]. - The Company's fleet includes tanker vessels, bulkers, container vessels, car carriers, and offshore drilling rigs [3]. - SFL's long-term distribution capacity is supported by a portfolio of long-term charters and significant growth in its asset base over time [3].

Core Viewpoint - SFL Corporation Ltd. has agreed to sell two Suezmax tankers, SFL Thelon and SFL Ottawa, for approximately $57 million each, expecting net proceeds of about $26 million per vessel after debt repayment and termination fees, with an aggregate book gain of around $23 million from the transaction [1][2][4] Group 1: Transaction Details - The vessels are scheduled for delivery in the fourth and first quarters, respectively [2] - The company has also mutually agreed to terminate charters for two other Suezmax tankers, SFL Albany and SFL Fraser, with a termination fee in line with a pre-agreed profit share arrangement [3] - The retained vessels are eco-designed and equipped with scrubbers, initially to be employed in the spot market [3] Group 2: Management Commentary - The CEO of SFL Management AS highlighted the transaction as a demonstration of the embedded value in the fleet, realizing significant profit from the sale of 10-year-old vessels shortly after acquisition while benefiting from solid cash flows [4] - A portion of the proceeds from the sales will be reinvested into younger, more fuel-efficient vessels to capitalize on the current strong charter market [4] Group 3: Company Background - SFL has a strong track record in the maritime industry, having paid dividends quarterly since its NYSE listing in 2004, with a diverse fleet including tankers, bulkers, container vessels, car carriers, and offshore drilling rigs [5]

Core Insights - SFL Corporation Ltd. has agreed to sell two 2015-built Suezmax tankers to a subsidiary of Koch Industries for approximately $57 million each, with net proceeds estimated at $26 million per vessel after debt repayment and termination fees [1][2] - The transaction is expected to yield an aggregate book gain of approximately $23 million, which will be allocated between the two vessels [2] - The company will also terminate charters for two 2020-built Suezmax tankers with Koch, incurring a termination fee as per a pre-agreed profit-sharing arrangement [3] - The retained vessels are eco-designed and equipped with scrubbers, initially employed in the spot market, with potential for longer-term employment [3] - The CEO highlighted the transaction as a demonstration of the fleet's embedded value, allowing for significant profit realization from older vessels while benefiting from solid cash flows [4] - A portion of the proceeds from the sale will be reinvested in younger, more fuel-efficient vessels to capitalize on the current strong charter market [4] Company Overview - SFL Corporation has a diverse fleet including tankers, bulkers, container vessels, car carriers, and offshore drilling rigs, and has paid dividends quarterly since its NYSE listing in 2004 [5] - The company's long-term distribution capacity is supported by a portfolio of long-term charters and significant growth in its asset base over time [5]

Core Insights - SFL Corporation Ltd. (NYSE:SFL) is recognized as one of the 15 stocks with the highest dividend yields to invest in [1] - BTIG has raised its price target for SFL to $11 from $10 and reaffirmed a Buy rating, highlighting a strong Q3 performance with adjusted EBITDA of $113 million, exceeding the consensus estimate by 19% [2] - The company maintained its quarterly dividend of $0.20, representing a 41% payout of operating cash flow and an annualized yield of approximately 10% [2] Financial Performance - In Q3 2025, SFL reported revenue of $178.2 million, with 86% derived from shipping charter hire and 14% from energy, despite a more than 30% decline from the previous year, it still surpassed expectations by $4.6 million [4] - The net income for the quarter was $8.6 million, equating to $0.07 per share [4] - As of September 30, 2025, SFL had $278 million in cash and cash equivalents, along with an additional $44 million available under undrawn credit facilities [4] Dividend Reliability - SFL has consistently paid dividends for 87 consecutive quarters, currently offering a yield of 9.75% as of November 16 [5] - The company owns and charters maritime and offshore assets, operating a fleet that supports medium and long-term contracts across the shipping and energy sectors [5] Share Buyback and Investment Strategy - Although SFL did not repurchase shares in the last quarter, it has $80 million remaining under its buyback authorization, valid until Q2 2026 [3] - The company continues to invest in its fleet, although it faces pressure on near-term operating cash flow due to re-deliveries and a soft drilling market [3]

Core Insights - The company aims to generate a 7%+ income yield by investing in a portfolio of energy stocks while minimizing the risk of principal loss [1] Group 1 - The service offers subscribers access to exclusive investment ideas earlier than they are released to the general public, with many ideas not released at all [1] - Subscribers receive in-depth research that is not available to the general public [1] - A two-week free trial is currently being offered for the service [1]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenues of $178 million and an EBITDA-equivalent cash flow of $113 million, with a total EBITDA of $473 million over the past 12 months, indicating strong operational stability [3][6] - The net income for the quarter was $8.6 million, translating to $0.07 per share, with total operating expenses reduced to $69 million from $86 million in the previous quarter [16][17] Business Line Data and Key Metrics Changes - The container vessel segment contributed $82 million to adjusted EBITDA, while the car carrier fleet added $23 million, and the tanker segment generated $44 million [14] - Dry bulk contributed $6 million, down from $19 million, due to the divestiture of 13 dry bulk carriers as part of the fleet renewal strategy [14][15] Market Data and Key Metrics Changes - The charter backlog stands at approximately $4 billion, with two-thirds contracted to investment-grade counterparties, providing strong cash flow visibility [6][17] - The overall utilization across the shipping fleet in Q3 was about 98.7%, with adjusted utilization at 99.9% [9] Company Strategy and Development Direction - The company is focused on fleet renewal, having sold older vessels and invested in cargo handling and fuel efficiency upgrades, with 11 vessels now capable of operating on LNG fuel [4][11] - The company aims to diversify its asset base and maintain a sustainable long-term capacity for shareholder returns, supported by a solid liquidity position [7][17] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about securing new employment for the Hercules rig, despite its current idle status, and is exploring various opportunities for its utilization [5][19] - The company is cautious about the geopolitical situation affecting shipping routes, particularly in the Red Sea, and is closely monitoring developments [28] Other Important Information - The company has returned approximately $2.9 billion to shareholders over 87 consecutive quarters, with a dividend yield of over 10% based on the recent share price [6][17] - The company has about $80 million remaining on a $100 million share buyback program, having repurchased $10 million worth of shares at an average price of $7.98 per share [26] Q&A Session Summary Question: Expectations for Hercules leasing in the new year and impact of Gulf of Mexico lease sale - Management is exploring all opportunities for the Hercules rig, focusing on areas where it has unique capabilities, such as the North Sea and Canadian markets [19][20] Question: Type of work considered for Hercules - The company is open to various opportunities for the Hercules, including well intervention and exploration drilling, and has made upgrades to facilitate development drilling [21][22] Question: Securing long-term work for tankers - It is too early to secure long-term work for vessels rolling off charters, but there is significant value linked to profit-sharing features in existing contracts [23] Question: Update on the $100 million buyback - Approximately $80 million remains on the buyback program, with $10 million repurchased this year [26] Question: Impact of Houthi attacks on shipping in the Red Sea - Management is cautious and monitoring the situation, noting that any return to normalcy in the region will be gradual [28] Question: Purchase obligations in charter contracts - The company has shifted from bareboat charters to time charters, reducing purchase obligations and maintaining upside in residual vessel value [30] Question: Outlook for new transactions outside the container segment - The company is open to opportunities across various maritime segments, focusing on strong counterparties and favorable deal structures [31][32]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenues of $178 million and an EBITDA-equivalent cash flow of $113 million, with a total EBITDA of $473 million over the past 12 months, indicating strong operational stability [3][6] - The net income for the quarter was $8.6 million, translating to $0.07 per share, with total operating expenses reduced to $69 million from $86 million in the previous quarter [16][17] Business Line Data and Key Metrics Changes - The container vessel segment contributed $82 million to adjusted EBITDA, while the car carrier fleet added $23 million, and the tanker segment generated $44 million [14] - Dry bulk contributed $6 million, down from $19 million, due to the divestiture of 13 dry bulk carriers as part of the fleet renewal strategy [14][15] Market Data and Key Metrics Changes - The charter backlog stands at approximately $4 billion, with two-thirds contracted to investment-grade counterparties, providing strong cash flow visibility [6][17] - The overall utilization across the shipping fleet in Q3 was about 98.7%, with adjusted utilization at 99.9% [9] Company Strategy and Development Direction - The company is focused on fleet renewal, having sold five older dry bulk vessels and redelivered eight Cape-sized bulkers, which has improved operational and fuel efficiency [4][8] - Investments in cleaner technology are ongoing, with 11 vessels now capable of operating on LNG fuel, including five newbuildings under construction [4][11] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about securing new employment for the Hercules drilling rig, despite its current idle status [5][19] - The company emphasizes the importance of energy efficiency and emissions reduction to attract and retain high-quality charterers, with ongoing investments in modernizing the fleet [11][12] Other Important Information - The company has returned approximately $2.9 billion to shareholders over 87 consecutive quarters, with a dividend yield of over 10% based on the recent share price [6][17] - The company has about $80 million remaining on a $100 million share buyback program, having repurchased $10 million worth of shares at an average price of $7.98 per share [26] Q&A Session Summary Question: Expectations for Hercules leasing in the new year and impact of Gulf of Mexico lease sale - Management is exploring all opportunities for the Hercules rig, focusing on areas where it has unique capabilities, such as the North Sea and Canadian markets [19][20] Question: Consideration of well intervention opportunities for Hercules - The company is open to any opportunity for the Hercules, including well intervention or exploration drilling, and has made upgrades to the rig for development drilling [22] Question: Outlook for securing long-term work for tankers - It is too early to secure long-term work for vessels rolling off charters, but there is significant value linked to profit-sharing features in existing contracts [23] Question: Update on the $100 million buyback - Approximately $80 million remains on the buyback program, with $10 million repurchased so far this year [26] Question: Impact of Houthi attacks on commercial shipping in the Red Sea - Management is cautious and believes a slow return to normal activity in the Red Sea is likely, with potential reductions in operating expenses if vessels return to the region [28][29] Question: Purchase obligations in charter contracts - The company has transformed its business model to focus on time charters, reducing the prevalence of purchase obligations in contracts [30] Question: Outlook for new transactions outside the container segment - The company is open to opportunities across various maritime segments, focusing on strong counterparties and favorable deal structures [31][32]

Financial Data and Key Metrics Changes - For Q3 2025, the company reported revenues of $178 million and an EBITDA-equivalent cash flow of $113 million, with a total EBITDA of $473 million over the past 12 months, indicating strong operational stability [3][12] - Net income for the quarter was $8.6 million, translating to $0.07 per share, with total operating expenses reduced to $69 million from $86 million in the previous quarter [15][16] Business Line Data and Key Metrics Changes - The container vessel segment contributed $82 million to adjusted EBITDA, while the car carrier fleet generated $23 million, down from $26 million due to scheduled dry docking of SFL Composer [12][14] - The tanker segment produced $44 million, benefiting from long-term charters, while dry bulk contributed $6 million, down from $19 million due to divestitures [12][14] Market Data and Key Metrics Changes - The charter backlog stands at approximately $4 billion, with two-thirds contracted to investment-grade counterparties, providing strong cash flow visibility [5][16] - The overall utilization of the shipping fleet in Q3 was about 98.7%, with adjusted utilization reaching 99.9% when accounting for unscheduled technical issues [8] Company Strategy and Development Direction - The company is focused on fleet renewal, having sold older vessels and invested in cargo handling and fuel efficiency upgrades, with 11 vessels now capable of operating on LNG fuel [4][10] - The strategy includes securing long-term charters with strong counterparties, as evidenced by new five-year charters for three container vessels, adding approximately $225 million to the charter backlog from 2026 onwards [4][5] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about securing new employment for the Hercules drilling rig, despite its current idle status, and is exploring various opportunities for its deployment [5][19] - The company emphasizes the importance of energy efficiency and emissions reduction in attracting and retaining charterers, highlighting ongoing investments in modernizing the fleet [10][11] Other Important Information - The company declared a quarterly dividend of $0.20 per share, marking the 87th consecutive dividend, with a total of approximately $2.9 billion returned to shareholders over the years [5][17] - The financial position remains strong, with approximately $278 million in cash and cash equivalents and $40 million in undrawn credit lines, totaling $320 million in liquidity [15][16] Q&A Session Summary Question: Expectations for Hercules leasing in the new year and impact of Gulf of Mexico lease sale - Management is exploring all opportunities for Hercules, focusing on markets where its unique capabilities are needed, such as the North Sea and Canada, rather than the Gulf of Mexico [19][20] Question: Consideration of well intervention opportunities for Hercules - The company is open to any opportunity for the rig, including well intervention or exploration drilling, and has made upgrades to facilitate development drilling [23] Question: Outlook for securing long-term work for tankers - It is too early to secure long-term work for vessels rolling off charters, but there is significant value linked to profit-sharing features in existing contracts [24] Question: Update on the $100 million buyback implementation - Approximately $80 million remains on the buyback, with $10 million of shares repurchased at an average price of $7.98 per share [27] Question: Impact of potential pause in Houthi attacks on commercial shipping in the Red Sea - Management is cautious and believes it will take time for container ship operators to return to the region, with a focus on safety and risk evaluation [30][32] Question: Purchase obligations in charter contracts - The company has shifted from bareboat charters to time charters, reducing purchase obligations and maintaining upside in residual values [34] Question: Outlook for new transactions outside the container segment - The company is open to opportunities across various maritime sectors, focusing on strong counterparties and structuring deals with favorable return characteristics [35][36]

Financial Highlights - SFL announced a dividend of $0.20 per share for the quarter[5, 25] - The company reported a net income of $9 million, resulting in earnings per share of $0.07[5] - Gross revenue reached $178 million[5] - Adjusted EBITDA was $113 million[5] Contracted Revenue and Backlog - The company has a contracted backlog of $40 billion[5, 8, 25] - Approximately 67% of the contracted backlog is with investment-grade counterparties[8] Fleet and Operations - The company's portfolio includes 30 container vessels, 18 tankers, 7 car carriers, and 2 energy assets[8] - The average charter term for container vessels is 72 years, for tankers 67 years, for car carriers 35 years, and for energy assets 33 years[8] - Utilization rates for container vessels, car carriers, tankers, and dry bulk vessels were all at 100%[11] - The company invested approximately $100 million in vessel efficiency upgrades since 2023[5] Balance Sheet and Capital Expenditure - The company's cash and cash equivalents at the end of the quarter were $278 million[22, 25] - The company has approximately $44 million of undrawn credit lines[23] - Remaining capital expenditures of $850 million are expected on five large container newbuildings[23]