DHT Holdings: The Cheapest VLCC Owner In A Booming Rate Market (Rating Downgrade)

Melissa Tucker 1.7K Followers Follow Summary DHT Holdings remains the cheapest US-listed VLCC pure play, offering significant upside despite extensive charter coverage below current market rates. DHT's charter strategy ensures stable base earnings but limits spot market upside, with 50% of its fleet chartered at rates up to $109k/day versus the current $120k/day market. Q2 results exceeded estimates with $1.23 EPS and a $1.22 dividend, while Q3 guidance suggests another strong quarter and a potential 20% annualized yield. My fair value for DHT is $25 per share, representing a 25% upside and a 16% yield, justified by discounted NAV and robust financials. claffra/iStock via Getty Images I have covered DHT Holdings, Inc. ( DHT ) before , where I outlined the investment thesis in detail and explained why I considered it an interesting buy. Since then, the company reported great Q2 This article was written by Melissa Tucker 1.7K Followers Follow With a professional background spanning multiple industries, from ecnomocis to logistics and construction to retail, I bring a diverse perspective to investing. My international education and career experiences have provided me with a global outlook and the ability to analyze market dynamics from different cultural and economic perspectives. I have been actively investing for over a decade, honing a strategy that focuses on cyclical industries while maintaining a diversified portfolio that includes bonds, commodities, and forex. My interest in cyclical sectors stems from their potential for significant returns during periods of economic recovery and growth. However, I also recognize the importance of balancing risk, which is why I incorporate fixed-income investments (long or short). Analyst’s Disclosure: I/we have a beneficial long position in the shares of DHT, ECO either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.