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FLEX LNG

FLNG
51
Marine Shipping · Industrials
Winston Score
51
Winston is curious
Mixed quality — meaningful strengths and weaknesses.

Flex LNG is a shipping company that transports liquefied natural gas (LNG) across the ocean. LNG is natural gas that has been cooled to a liquid so it can be loaded onto special ships and moved from one country to another. The company owns a fleet of modern LNG carrier vessels and earns money by renting those ships to energy companies, utilities, and gas producers who need to move large volumes of gas between continents.

Flex LNG makes most of its money through long-term charter contracts, where customers pay a fixed daily rate to use a ship for several years at a time. The company operates globally, with routes connecting major LNG export hubs like the United States, Qatar, and Australia to buyers in Europe and Asia. Its modern fleet of vessels is a competitive advantage, as newer ships are more fuel-efficient and attractive to charterers. The main risk is that when existing contracts expire, the company must renew them in a market where rates can fall sharply if LNG demand weakens.

Winston Score History

Score breakdown

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Quality

Gross Margin
45.7%
Healthy — 45.7% gross margin
Operating Margin
42.5%
Excellent — 42.5% operating margin
ROCE
1.4%
Weak — 1.4% return on capital

ROIC between 0% and 5%. They earn a few cents back per dollar invested in the business.

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Growth

Sales YoY
-4.2%
Shrinking sales (-4.2% YoY)
EPS YoY
-27.1%
Earnings shrinking (-27.1% YoY)

Earnings per share down more than 10%. Either a bad year, or a real decline.

EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Cash Conversion
136%
Turns 136% of profit into real cash
FCF Margin
30.3%
Converts sales into free cash efficiently (30.3%)

Free cash flow margin above 20%. Out of every $100 in sales, more than $20 is real cash they keep.

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Stability

Debt / Equity
2.61
Heavy debt load (2.61)
Interest Cover
1.80x
Dangerous — barely covers interest (1.8x)

Interest coverage between 1 and 3. Profits cover interest, but with little room to spare.

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Valuation

P/E Ratio (TTM)
22.1x
no trend
Growth-priced — P/E 22.1

P/E above the market average. People are paying up for expected growth.

P/E vs Forward
+8.4
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (22.1 → 13.7)

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Dividends

Dividend Yield
10.24%
no trend
Healthy income — 10.24% yield

Yield above 6% — often a flag the market is pricing in a cut.

Dividend Growth
+0.0%
no trend
Dividend flat

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