The markets have been quite volatile lately due to a mix of weak economic fundamentals and a rallying stock market. In this environment of high uncertainty, some analysts have been cautioning investors to go for value over growth.
Essentially this means that in these times, it is safer to choose a stock that has strong intrinsic value, over those with prospects of exponential growth. However, it does not have to be a case of either-or. There are stocks that offer a perfect mix of both. One such stock is New Fortress Energy Inc [NASDAQ:NFE].
Since April, when most stocks were hit by the COVID-19 lockdowns, this stock has been on an uptrend from lows of $10 to its current price of $31. The upside momentum doesn’t seem to be slowing down, and yesterday the stock edged higher by 10%. This makes it a growth stock, since its growth during the COVID-19 period is only comparable to that of the big tech companies.
As a value hold, the company has several factors that make it a value hold. The first one is it’s strong, and growing financial-base. In early August, the company released its Q2 financial results and they pointed to a strong financial base.
The company reported that its operating margins improved by $17.4 million compared Q1. The company also reported that it recorded massive sales volumes increments compared to Q1. It specifically noted that the average daily sales volumes stood at 978k gallons, compared to 223k in Q1 of 2020. The company also announced that its daily volumes are expected to rise, and range between 1.7 and 2 million for the whole of 2020.
The company also reported that in Q2, it had completed the termination of 8 cargos and received $108 million in payments. This points to a company whose finances are in order despite the tough economy.
Another pointer to the company’s intrinsic value is the fact that it is declaring dividends. On the 27th of August, the company announced that its board had approved a dividend of $0.10 per every class A of common stock.
Commenting on the dividend, CEO Wes Edens stated that the declaration of dividends was a major step towards the company’s goal to become a global investment-grade company. From an investor perspective, the fact that the company is in a position to record growth during a tough economy and also declare a dividend makes it a value buy.
About New Fortress Energy Inc
New Fortress Energy Inc is an energy infrastructure company. It is headquartered in New York, New York.