International Seaways: The Closest Way To Buy Tanker ETF And Collect Double-Digit Yields

Core Viewpoint - International Seaways (INSW) is well-positioned to benefit from the growing dislocation between oil supply and demand, with a strong focus on dividends and share buybacks, making it an attractive investment opportunity [1][20]. Company Overview - INSW owns a large fleet of crude and product tankers with an average age of 12.1 years, generating over 80% of its revenues from pool agreements [2][3]. - The fleet consists of more than 70 tankers, including 13 VLCCs, 13 Suezmax, and 36 Handymax/MR2 vessels [3]. Financial Performance - In 2Q24, INSW reported a fleetwide day rate of $37,940 and a daily operating expense (OPEX) of $8,600, with EPS declining to $2.91 from $3.11 year-over-year [2][10]. - The company declared a dividend of $1.50 per share for 2Q24, resulting in an 11.8% yield, and repurchased shares worth $25 million as part of a $50 million buyback program [2][14]. Revenue Breakdown - More than 80% of INSW's revenue comes from pool agreements, with 11% from time charters and 7% from voyage charters [2][4]. - Pool revenue declined by $40 million year-over-year, while time charter revenue grew by 19% [10]. Operating Efficiency - INSW's breakeven cash flow is $16,100 per day, indicating operational efficiency, and the company has maintained stable operating expenses despite revenue fluctuations [6][19]. - The company has a healthy balance sheet with a loan-to-value (LTV) ratio below 30% and total liquidity of $662 million [11][13]. Market Position - INSW trades at 76% of its net asset value (NAV), with a market capitalization of $2,450 million and a NAV of $3,207 million [15]. - The tanker market is expected to experience a supply deficit in the next 18-24 months due to an aging fleet and limited new ship deliveries [19]. Investment Appeal - The combination of a double-digit dividend yield, active share buybacks, and a solid financial position supports a "Strong Buy" rating for INSW [20].