Two Tanker Stocks with Great Dividends

Are they are buy or should you steer clear?

Author

Joshua Clear
May 24, 2025

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Hafnia Limited & Teekay Corporation: Tanker Stocks Worth a Look—or a Pass?

If you’re hunting for opportunities in the shipping sector, Hafnia Limited and Teekay Corporation are two tanker giants making serious waves. But are these stocks a buy, or should you steer clear? Let’s break it down, plain and simple.

Hafnia Limited: Dividend Darling or Just Riding the Wave?

Why Hafnia Could Be a Buy:

  • Dividend Machine: Hafnia is handing out cash like candy. In Q1 2025, they paid $0.1015 per share, sticking to an 80% payout ratio—even as profits cooled off a bit. That’s a big draw if you love income stocks.

  • Fleet Expansion: Their fleet has ballooned to over 120 vessels, and they’re locking in strong charter rates (averaging $24,839/day in Q2 2025). More ships, more revenue.

  • Financial Health: With a net asset value of $3.69 billion and a debt-to-equity ratio of just 0.65, Hafnia isn’t over-leveraged. That’s a solid cushion if the market turns choppy.

  • Global Demand: As the world keeps burning refined products, Hafnia’s role as a top transporter isn’t going away anytime soon.

But Here’s the Flip Side:

  • Earnings Dip: Net profit dropped to $32.2 million in Q1 2025, down from previous highs. If rates fall or oil demand wobbles, dividends could be at risk.

  • Asset Volatility: Tanker values can swing wildly, and Hafnia’s NAV dipped recently as ship prices softened.

  • Market Cyclicality: Shipping is a boom-and-bust business. When rates drop, even the best operators feel it.

Teekay Corporation: Turnaround Story or Value Trap?

Why Teekay Looks Tempting:

  • Lean and Mean: Teekay has been shedding non-core assets and refocusing on its tanker business, which could mean a leaner, more profitable operation going forward.

  • Operational Strength: Their fleet is modern and well-managed, positioning Teekay to capture upside if tanker rates stay strong.

  • Potential Turnaround: With restructuring largely behind them, Teekay’s earnings could rebound if global oil flows remain robust.

But Don’t Ignore These Risks:

  • No Big Dividend: Unlike Hafnia, Teekay isn’t a dividend play. If you’re looking for steady income, look elsewhere.

  • Still Rebuilding: While the turnaround is promising, it’s not a done deal. Any stumble in execution or a downturn in shipping rates could hit hard.

  • Exposure to Volatility: Like all tanker companies, Teekay is at the mercy of global oil demand, geopolitical shocks, and regulatory changes.

Hafnia Limited: The Steady Cash Cow

Value Angle:

  • Dirt-Cheap Valuation: Trading at a P/E of 9.5x for 2025 (vs sector average 14x), Hafnia screams undervalued3. Its price-to-book ratio of 1.14x3 suggests the market isn’t pricing in its $3.69B net asset value1.

  • Dividend Safety Net: With an 8.4% dividend yield projected for 20253 and an 80% payout ratio, Hafnia rewards shareholders even in lean times. Free cash flow hit $980.8M in 20243, covering dividends comfortably.

  • Debt Discipline: A 0.65 debt-to-equity ratio1 and declining leverage (projected 0.93x Debt/EBITDA in 20243) mean less risk during downturns.

Long-Term Growth Levers:

  • Fleet Modernization: Adding 50+ vessels by 2025 positions Hafnia to capitalize on stricter environmental regulations (think IMO 2030)1.

  • Refined Products Demand: Global gasoline/diesel consumption is rising 1.5% annually1, and Hafnia’s specialization here insulates it from crude oil volatility.

  • ESG Edge: Early adoption of dual-fuel vessels could lock in premium charter rates as carbon pricing expands.

Red Flags:

  • Earnings Volatility: Projected 2025 net income drop to $326.8M (from $774M in 2024)3 shows sensitivity to rate fluctuations.

  • Fleet Overhang: A 2025 CAPEX spike to $101.1M3 could strain cash if demand softens.

Teekay Corporation: The Turnaround Bet

Value Angle:

  • Profitability Surge: Gross margins jumped from 24.3% (2022) to 32.3% (2024)2, while operating margins hit 36.14% (TTM)2—best-in-class efficiency.

  • Debt Squeeze: Reduced leverage from restructuring positions Teekay to benefit fully from rate upswings.

  • Hidden Assets: A modern fleet (average age <10 years) isn’t fully priced into its $1.47B market cap.

Long-Term Growth Levers:

  • Strategic Pivots: Exiting non-core businesses (like LNG) lets Teekay focus on high-margin tanker routes2.

  • Geographic Expansion: Growing Asia Pacific revenue (22% of total2) taps into booming Asian refinery output.

  • Operational Muscle: A 92.5% fleet utilization rate2 means less downtime, more revenue.

Red Flags:

  • No Dividend Cushion: Unlike Hafnia, Teekay plows cash into growth—great for expansion, bad for income seekers.

  • Execution Risk: The turnaround isn’t complete; 2025 projections show modest 7.3% revenue growth2.

  • Valuation Questions: With no clear P/E data, it’s harder to gauge if the stock’s fairly priced.

The Verdict: Different Ships, Different Voyages

  • Hafnia suits risk-averse value investors: Strong dividends, low debt, and sector-beating margins make it a defensive pick. But don’t expect explosive growth—this is a slow-and-steady play.

  • Teekay appeals to growth-at-a-reasonable-price (GARP) investors: If management delivers on operational targets and tanker rates stay firm, the stock could re-rate sharply.

Wildcard: Both companies face a $200/ton carbon tax proposal by 2030, which could add 15-20% to operating costs. Hafnia’s greener fleet gives it an edge her

The Bottom Line

Both Hafnia and Teekay offer intriguing upside if you believe in the tanker market’s future. Hafnia is the pick for dividend lovers and those who want exposure to a growing fleet. Teekay is more of a turnaround bet—potentially higher risk, but maybe higher reward if management delivers.

As always, do your own research and consider your risk tolerance before jumping in. Shipping stocks can be rewarding, but they’re not for the faint of heart.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always consult a licensed financial advisor before making investment decisions.