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SFL Corporation (SFL)
NYSE:SFL
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SFL Corporation
(NYSE:SFL)
Rating:71Outperform
Price Target:―
SFL Corporation (SFL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$1.27B
Dividend Yield12.41%
Average Volume (3M)1.19M
Price to Earnings (P/E)21.0
Beta (1Y)0.55
Revenue Growth6.68%
EPS Growth-57.55%
CountryUS
Employees24
SectorIndustrials
Sector Strength90
IndustryMarine Shipping
Share Statistics
EPS (TTM)0.03
Shares Outstanding145,708,530
10 Day Avg. Volume1,136,970
30 Day Avg. Volume1,189,309
Financial Highlights & Ratios
PEG Ratio-0.95
Price to Book (P/B)0.99
Price to Sales (P/S)0.00
P/FCF Ratio-4.40
Enterprise Value/Market Cap3.09
Enterprise Value/Revenue1.14
Enterprise Value/Gross Profit12.40
Enterprise Value/Ebitda2.53
Forecast
1Y Price Target
$12.00Price Target Upside40.35% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
SFL Corporation Business Overview & Revenue Model
Company DescriptionSFL Corporation Ltd., a maritime and offshore asset owning and chartering company, engages in the ownership, operation, and chartering out of vessels and offshore related assets on medium and long-term charters. The company is also involved in the charter, purchase, and sale of assets. In addition, it operates in various sectors of the maritime, and shipping and offshore industries, including oil, chemical, oil product, container, and car transportation, as well as dry bulk shipments and drilling rigs. As of December 31, 2021, the company owned six crude oil tankers, 15 dry bulk carriers, 35 container vessels, two car carriers, one jack-up drilling rig, one ultra-deepwater drilling unit, two chemical tankers, and four oil product tankers. It primarily operates in Bermuda, Cyprus, Liberia, Norway, Singapore, the United Kingdom, and the Marshall Islands. The company was formerly known as Ship Finance International Limited and changed its name to SFL Corporation Ltd. in September 2019. SFL Corporation Ltd. was incorporated in 2003 and is based in Hamilton, Bermuda.
How the Company Makes MoneySFL Corporation makes money primarily through the leasing of its shipping vessels to major international shipping companies and operators under long-term charter agreements. These agreements provide predictable cash flows and reduce exposure to market volatility. The company's revenue streams are diversified across different shipping sectors, including crude oil tankers, dry bulk carriers, and container ships. Additionally, SFL Corporation engages in strategic partnerships and joint ventures, enhancing operational efficiency and expanding its market presence. This diversified approach, along with a focus on asset management and operational excellence, contributes significantly to SFL's earnings.
SFL Corporation Financial Statement Overview
Summary
SFL Corporation exhibits strong revenue and profit growth, highlighted by improved margins and ROE. However, high leverage and negative free cash flow due to capital expenditures present potential risks. The company should focus on balancing growth initiatives with debt management and cash flow improvements to sustain its financial health.Income Statement
The company has demonstrated strong revenue growth, with a notable increase from $744.3 million in 2023 to $891.6 million in 2024, marking a 19.8% growth rate. Gross Profit Margin increased to 34.7% in 2024 from 31.8% in 2023, indicating improved efficiency. Net Profit Margin also improved from 11.3% to 14.7%, showcasing enhanced profitability. EBIT and EBITDA margins are robust, with slight improvements. Overall, the company shows strength in revenue and profit growth, though it should continue to monitor expense management closely.75
Positive
Balance Sheet
The Debt-to-Equity ratio is relatively high at 2.52, indicating significant leverage, which poses potential financial risk. However, the Return on Equity improved to 11.6% in 2024 from 8.1% in 2023, reflecting better utilization of equity. The Equity Ratio remains stable at 27.5%, showing a balanced capital structure. While the company is leveraging effectively for growth, maintaining a high level of debt could be a concern in adverse conditions.68
Positive
Cash Flow
Free Cash Flow has turned negative in 2024 to -$275 million due to high capital expenditures, a decrease from the previous year's positive $78.7 million. The Operating Cash Flow to Net Income ratio is approximately 2.83, illustrating strong cash generation relative to net income, though free cash flow remains a challenge. The company should focus on managing capital expenditures to improve free cash flow.60
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 891.62M | 744.33M | 670.39M | 513.40M | 471.05M | Gross Profit |
| 309.14M | 236.51M | 277.42M | 218.33M | 204.13M | EBIT |
| 306.72M | 240.18M | 275.47M | 242.84M | 201.37M | EBITDA |
| 563.45M | 468.33M | 507.93M | 343.69M | 18.01M | Net Income Common Stockholders |
| 130.65M | 83.94M | 130.06M | 76.47M | -346.07M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 138.29M | 191.24M | 195.65M | 166.83M | 244.25M | Total Assets |
| 4.11B | 3.73B | 3.86B | 3.46B | 3.09B | Total Debt |
| 2.84B | 2.57B | 2.67B | 2.41B | 2.22B | Net Debt |
| 2.70B | 2.40B | 2.49B | 2.27B | 2.01B | Total Liabilities |
| 2.98B | 2.69B | 2.77B | 2.48B | 2.30B | Stockholders Equity |
| 1.13B | 1.04B | 1.09B | 982.33M | 795.65M |
| Cash Flow | Free Cash Flow | |||
| -275.00M | 78.67M | -247.37M | -288.03M | 156.43M | Operating Cash Flow |
| 369.86M | 343.09M | 355.13M | 293.60M | 276.48M | Investing Cash Flow |
| -617.50M | -103.89M | -499.09M | -389.05M | 176.34M | Financing Cash Flow |
| 216.70M | -262.06M | 178.37M | 25.02M | -431.43M |
SFL Corporation Technical Analysis
Neutral
8.55
Price Trends
8.13
Positive
8.94
Negative
9.63
Negative
Market Momentum
0.17
Negative
56.79
Neutral
61.69
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SFL, the sentiment is Neutral. The current price of 8.55 is above the 20-day moving average (MA) of 8.40, above the 50-day MA of 8.13, and below the 200-day MA of 9.63, indicating a neutral trend. The MACD of 0.17 indicates Negative momentum. The RSI at 56.79 is Neutral, neither overbought nor oversold. The STOCH value of 61.69 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for SFL.
SFL Corporation Risk Analysis
SFL Corporation disclosed 61 risk factors in its most recent earnings report. SFL Corporation reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 3 New Risks
1.
As a foreign private issuer, we are permitted, and intend, to follow certain home country corporate governance practices instead of otherwise applicable NYSE requirements, which may result in less protection than is accorded to investors under rules applicable to U.S. domestic issuers. Q4, 2024
2.
An increase in trade protectionism, the unraveling of multilateral trade agreements and a decrease in the level of China's export of goods and import of raw materials could have a material adverse impact on our charterers' business and, in turn, could cause a material adverse impact on our results of operations, financial condition and cash flows. Q4, 2024
3.
Technological developments which affect global trade flows and supply chains may affect the demand for our vessels. Q4, 2024
SFL Corporation Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
79 Outperform | $1.03B | 3.53 | 12.57% | 5.34% | 17.77% | -5.90% | |
78 Outperform | $1.62B | 3.56 | 14.14% | 3.88% | 4.93% | -17.08% | |
76 Outperform | $916.99M | 2.42 | 27.25% | 6.72% | 3.94% | 19.85% | |
75 Outperform | $1.19B | 3.66 | 11.12% | 0.50% | 0.28% | -17.09% | |
71 Outperform | $1.27B | 20.99 | 5.09% | 12.41% | 6.68% | -57.55% | |
69 Neutral | $1.59B | 7.16 | 6.06% | 13.48% | -7.73% | -39.13% | |
64 Neutral | $4.46B | 11.94 | 5.17% | 249.36% | 4.00% | -12.35% |
* Industrials Sector Average
Performance Comparison
SFL
SFL Corporation
8.55
-4.32
-33.57%
CMRE
Costamare
8.44
-2.08
-19.77%
DAC
Danaos
84.73
1.67
2.01%
GSL
Global Ship Lease
25.65
-0.13
-0.50%
NMM
Navios Maritime Partners
39.30
-9.12
-18.84%
GOGL
Golden Ocean Group
7.54
-5.27
-41.14%
SFL Corporation Earnings Call Summary
Earnings Call Date:May 14, 2025
(Q1-2025)
| % Change Since: -1.95%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted consistent dividend payouts and a strong charter backlog, indicating resilience despite market volatility. However, the quarter was marred by a net loss due to impairments and idle assets like the Hercules rig. The new tariffs on Chinese-built and operated ships pose additional challenges. While operational improvements were noted, these were overshadowed by significant financial and strategic challenges.Q1-2025 Updates
Positive Updates
Consistent Dividend Payout
Announced the 85th consecutive dividend of $0.27 per share, returning over $2.8 billion to shareholders over 85 quarters, representing a yield of approximately 13% based on the share price.
Strong Charter Backlog
Charter backlog stands at $4.2 billion, with more than two-thirds of this from customers with investment-grade ratings, providing unique cash flow visibility and resilience.
High Fleet Utilization
Overall fleet utilization was 98.6%, with shipping fleet utilization at 99.8%, showcasing the high quality of vessel management.
Operational Improvements and Upgrades
Several vessels upgraded in the quarter, boosting cargo intake and fuel efficiency, contributing to higher charter extensions.
Negative Updates
Net Loss for the Quarter
Recorded a net loss of $32 million or $0.24 per share, impacted by impairments on older dry bulk vessels and the Hercules rig being idle.
Impairments on Dry Bulk Vessels
Impairments amounting to $34 million due to difficulties in finding new long-term charters for older vessels, exacerbated by market volatility and recession fears.
Hercules Rig Idle
The Hercules rig has been idle since Q4 2024, with market turmoil and oil price volatility delaying new employment opportunities, affecting financial results.
Impact of New Tariffs
Newly imposed U.S. tariffs and fees on Chinese-built and operated ships could affect approximately 27 vessels in the fleet, primarily car carriers and tankers.
Company Guidance
During the conference call, SFL Corporation provided guidance on its first-quarter performance for fiscal year 2025. The company reported revenues of $193 million and an EBITDA equivalent cash flow of $116 million, with a 12-month EBITDA equivalent totaling $545 million. Despite challenges, such as impairments on older dry bulk vessels and the Hercules drill rig being idle, SFL declared a net loss of $32 million or $0.24 per share. The company continues its dividend tradition, declaring $0.27 per share, representing a yield of approximately 13%. SFL's charter backlog stands at $4.2 billion, with over two-thirds from investment-grade customers, providing strong cash flow visibility. The company also highlighted its capital allocation strategy, which includes repurchasing $10 million worth of shares. Operationally, the fleet's utilization was high, with 98.6% for the shipping fleet and 97.2% overall, including drilling rigs. Despite new tariffs impacting 27 vessels, SFL plans to pass these costs to charters. The company maintains a solid liquidity position, with $174 million in cash and cash equivalents, and plans to continue investing in accretive assets.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.