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

DHT HOLDINGS INC (NYSE:DHT) stands out as a potential candidate for investors seeking long-term growth at a reasonable price (GARP). The company, which operates a fleet of crude oil tankers, meets key criteria from Peter Lynch’s investment strategy, balancing solid growth, profitability, and an attractive valuation.

Why DHT Fits the GARP Approach

• Earnings Growth: DHT has delivered a 5-year average EPS growth of 16.14%, aligning with Lynch’s preference for sustainable but not excessive growth (15-30% range).
• Reasonable Valuation: With a PEG ratio of 0.70 (below Lynch’s threshold of 1), the stock appears undervalued relative to its growth prospects.
• Strong Profitability: The company’s Return on Equity (ROE) of 16.90% exceeds the 15% minimum Lynch favored, indicating efficient use of shareholder capital.
• Healthy Balance Sheet: A Debt/Equity ratio of 0.27 suggests conservative leverage, well below the 0.6 threshold and even Lynch’s stricter 0.25 preference.
• Liquidity Strength: A Current Ratio of 1.59 confirms the company can comfortably cover short-term obligations.

Fundamental Highlights

DHT’s financial health is robust, with strong margins (32.87% profit margin) and a solid dividend yield of 6.76%. While the payout ratio is high, earnings growth is expected to accelerate (24.31% EPS growth projected), which could support future dividend sustainability. The stock trades at a P/E of 11.38, notably cheaper than both industry peers and the S&P 500 average.

For a deeper analysis, review the full fundamental report on DHT.

Our Peter Lynch Strategy screener lists more stocks matching these criteria and is updated daily.

Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own research before making investment decisions.