DHT HOLDINGS INC (NYSE:DHT) – A Strong Candidate for GARP Investors

DHT HOLDINGS INC (NYSE:DHT) emerged from our Peter Lynch-inspired screen as a potential fit for growth-at-a-reasonable-price (GARP) investors. The company, which operates a fleet of crude oil tankers, demonstrates solid fundamentals, including steady earnings growth, strong profitability, and a conservative balance sheet—all while trading at an attractive valuation.

Why DHT Fits the Peter Lynch Strategy

• Sustainable Growth: DHT has delivered a 5-year average EPS growth of 16.1%, aligning with Lynch’s preference for companies growing at a manageable pace (15-30%). Future EPS growth is projected at 20.7%, indicating accelerating profitability.
• Reasonable Valuation: With a PEG ratio (5Y) of 0.73, well below Lynch’s threshold of 1, the stock appears undervalued relative to its growth. The P/E ratio of 11.7 is also below industry and S&P 500 averages.
• Strong Profitability: The company’s return on equity (ROE) of 16.9% exceeds Lynch’s 15% benchmark, reflecting efficient use of shareholder capital. Margins are healthy, with a 32.9% profit margin outperforming most peers.
• Conservative Financials: A debt-to-equity ratio of 0.27 signals a low reliance on borrowing, in line with Lynch’s preference for financially stable firms. The current ratio of 1.59 ensures ample liquidity for short-term obligations.
• Dividend Appeal: DHT offers a 7.1% dividend yield, though investors should note the payout ratio is high at 85.8%, which may not be sustainable long-term without earnings growth.

Fundamental Snapshot

Our full fundamental report rates DHT a 7/10, highlighting its strong profitability and financial health. While revenue growth has been modest, earnings are expected to accelerate, supported by improving industry conditions.

For investors seeking similar opportunities, our Peter Lynch Strategy screener provides daily updates on stocks meeting these criteria.

Disclaimer

This is not investing advice. The observations here are based on current data, but investors should conduct their own research before making decisions.