- FLEX LNG maintains a high forward dividend yield near 11 percent supported by steady cash flow
- Long charter contracts provide exceptional revenue visibility for the next decade and beyond
- Valuation remains mixed with analysts divided on fair value despite stable fundamentals
Dividend Update High Yield Supported by Cash Flow
FLEX LNG entered late 2025 with renewed attention from income focused investors due to its steady dividend and long contract visibility. Shares recently traded near 26.22 USD with an annualized dividend of 3.00 USD, producing a forward yield of about 11.4 percent.
The company maintained its quarterly payout at 0.75 USD. The next ex dividend date is 28 November with payment on 11 December. While the one year dividend growth rate is negative at 28 percent, the payout has held steady since the reset from earlier elevated levels.
The yield sits above the five year average of roughly 13.5 percent, remaining competitive without signaling distress. Cash flow coverage is supported by a current ratio of 3.1 and free cash flow of about 2.90 USD per share.
Lifetime dividends paid have reached 13.53 USD per share, notable for a company listed less than a decade.
Contract Backlog The Core Support for the Dividend
A major strength for FLEX LNG is its unusually long fixed rate charter coverage of 56 to 85 years in total across the fleet. This protects the company from the volatile spot LNG shipping market where day rates often fluctuate sharply.
The backlog ensures predictable revenue and underpins the dividend even during weak shipping cycles. It also positions the company to benefit from rising global LNG demand trends including expanding export capacity and multi year supply agreements extending through 2030.
For income investors this level of visibility provides a foundation for the ongoing payout.
Valuation Investors Face Conflicting Indicators
Despite stable fundamentals the valuation picture is mixed. Consensus estimates show the stock trading about 6 percent above fair value. A discounted cash flow model however indicates potential undervaluation.
The company trades at a P E ratio of 14.4 which is middle ground for an LNG shipper with long term contracts. Models based on earnings place the shares 12 to 19 percent above fair value. These conflicting views help explain divided investor sentiment despite the high yield.
Risks Factors That Could Pressure the Payout
Several risks remain on the radar for dividend investors. Rising LNG vessel supply may weigh on charter rates and a sustained drop in global demand could reduce renewal pricing. Dividend growth is currently negative which limits prospects for increases.
Leverage is moderate to high with debt to capital near 71 percent. The current dividend appears secure but future total return will rely more on yield than price gains.
FLEX LNG remains one of the higher yielding names in the LNG midstream segment supported by long contracts and steady earnings. While valuation opinions vary the stability of cash flow continues to appeal to investors seeking reliable income. The upcoming 28 November ex dividend date marks the next opportunity to capture the 0.75 USD payout.
