Odfjell Drilling: Buy On Strong Industry Prospects And Juicy Dividend Yield

Summary Odfjell Drilling is an attractive niche player in the offshore drilling industry with a special focus on harsh environment operations. The company's owned fleet is fully contracted until at least H2-2027. As market conditions offshore Norway continue to strengthen, the company's fleet should remain employed for years to come. Odfjell Drilling remains committed to shareholder capital returns. The current dividend yield calculates to 9.5%, and quarterly distributions are expected to increase even further. Should the harsh environment market continue to strengthen, additional dividend capacity would be substantial, particularly in case of further fleet expansion. With almost 30% short-term upside and a juicy dividend yield, we are initiating coverage of Odfjell Drilling with a "Buy" rating and a price target of $13.50. Looking for more investing ideas like this one? Get them exclusively at Value Investor's Edge. Learn More » Sergei Dubrovskii/E+ via Getty Images Investment Thesis Almost eighteen months ago, we introduced our members at Value Investor's Edge to Odfjell Drilling ( ODFJF ), a Bermuda-incorporated offshore driller focused on harsh environment operations. Since that time, the stock price has appreciated This article was written by Henrik Alex 21.14K Followers Follow I am mostly a trader engaging in both long and short bets intraday and occasionally over the short- to medium term. My historical focus has been mostly on tech stocks but over the past couple of years I have also started broad coverage of the offshore drilling and supply industry as well as the shipping industry in general (tankers, containers, drybulk). In addition, I am having a close eye on the still nascent fuel cell industry.I am located in Germany and have worked quite some time as an auditor for PricewaterhouseCoopers before becoming a daytrader almost 20 years ago. During this time, I managed to successfully maneuver the burst of the dotcom bubble and the aftermath of the world trade center attacks as well as the subprime crisis.Despite not being a native speaker, I always try to deliver high quality research to followers and the entire Seeking Alpha community. Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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. Odfjell Drilling is part of our coverage universe at Value Investor's Edge (VIE). 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.