Scorpio Tankers Inc. (NYSE: STNG)

Sector: Energy Industry: Oil & Gas Midstream CIK: 0001483934
Market Cap 2.49 Bn
P/B 0.81
P/E 8.76
P/S 2.80
ROIC (Qtr) 8.06
Div Yield % 2.92
Rev 1y % (Qtr) -9.94
Total Debt (Qtr) 884.40 Mn
Debt/Equity (Qtr) 0.29

About

Scorpio Tankers Inc., listed on the New York Stock Exchange under the ticker symbol STNG, is a company that operates in the maritime transportation industry, specifically in the seaborne transportation of refined petroleum products worldwide. The company, established in the Republic of the Marshall Islands in 2

Price action

Investment thesis

Bull case

  • Strong operating cash flow of 439.69M provides robust 0.50x coverage of total debt 884.40M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 603.21M provide 4.61x coverage of short-term debt 130.73M, demonstrating strong liquidity position and minimal refinancing risk.
  • Strong tangible asset base of 4.02B provides 4.55x coverage of total debt 884.40M, indicating robust asset backing and low credit risk.
  • Strong operating cash flow of 439.69M provides 3.94x coverage of SG&A expenses 111.58M, showing efficient operational cost management.
  • Operating cash flow of 439.69M provides solid 2.18x coverage of current liabilities 201.40M, showing strong operational health.

Bear case

  • Operating cash flow of 439.69M provides thin coverage of dividend payments of (80.78M) with a -5.44 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • High receivables of 172.29M relative to inventory of 11.56M (14.90 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Free cash flow of 490.42M provides weak coverage of capital expenditures of (50.73M), with a -9.67 ratio suggesting additional external financing needs for growth initiatives.
  • Free cash flow of 490.42M represents just -14.11x of debt issuance (34.74M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • High depreciation of 181.58M relative to operating cash flow of 439.69M, which is 0.41x suggests significant maintenance capital requirements affecting free cash flow.

Peer comparison

Companies in the Oil & Gas Midstream
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 ENB Enbridge Inc 100.05 Bn 24.60 2.15 75.15 Bn
2 WMB Williams Companies, Inc. 73.60 Bn 31.09 6.40 27.99 Bn
3 EPD Enterprise Products Partners L.P. 69.94 Bn 12.09 1.32 33.58 Bn
4 KMI Kinder Morgan, Inc. 60.62 Bn 22.23 3.69 32.58 Bn
5 ET Energy Transfer LP 58.05 Bn 13.46 0.73 63.97 Bn
6 TRP Tc Energy Corp 55.97 Bn 22.78 5.27 44.47 Bn
7 MPLX Mplx Lp 54.03 Bn 11.23 4.22 25.92 Bn
8 OKE Oneok Inc /New/ 44.55 Bn 13.34 1.41 33.73 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 0.73 3.39
EV to Cash from Ops. EV/CFO 6.67 7.77
EV to Debt EV to Debt 3.32 -68.56
EV to EBIT EV/EBIT 8.06 12.77
EV to EBITDA EV/EBITDA 5.88 7.47
EV to Free Cash Flow [EV/FCF] EV/FCF 5.98 13.20
EV to Market Cap EV to Market Cap 1.18 2.49
EV to Revenue EV/Rev 3.30 4.48
Price to Book Value [P/B] P/B 0.81 94.01
Price to Earnings [P/E] P/E 8.76 12.31
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 3.52 -3.60
Dividend Payout Ratio % Div Payout % (Qtr) 25.60 72.05
Dividend per Basic Share Div per Share (Qtr) 1.60 1.46
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 15.20 32.66
Interest Coverage Int. cover (Qtr) 4.59 5.11
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -82.93 -17.97
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 200.10 16,113.89
Dividend Growth (1y) % Div 1y % (Qtr) 3.23 -1.32
EBIAT Growth (1y) % EBIAT 1y % (Qtr) -57.61 -5.21
EBITDA Growth (1y) % EBITDA 1y % (Qtr) -51.23 -4.54
EBIT Growth (1y) % EBIT 1y % (Qtr) -57.61 -11.94
EBT Growth (1y) % EBT 1y % (Qtr) -60.51 -230.00
EPS Growth (1y) % EPS 1y % (Qtr) -57.09 -44.55
FCF Growth (1y) % FCF 1y % (Qtr) -58.96 -0.80
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) -46.04 -1.23
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.22 0.76
Cash Payout Ratio Cash Payout (Qtr) 0.21 0.21
Cash Ratio Cash Ratio (Qtr) 3.00 0.81
Current Ratio Curr Ratio (Qtr) 4.81 1.65
Debt to Equity Ratio Debt/Equity (Qtr) 0.29 1.11
Interest Cover Ratio Int Coverage (Qtr) 4.59 5.11
Times Interest Earned Times Interest Earned (Qtr) 4.59 5.11
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 61.30 35.86
EBIT Margin % EBIT Margin % (Qtr) 40.91 27.76
EBT Margin % EBT Margin % (Qtr) 32.01 17.28
Gross Margin % Gross Margin % (Qtr) 62.70 48.56
Net Profit Margin % Net Margin % (Qtr) 32.00 15.36