Teekay Corporation (TK) | Investment Case

1. Company Snapshot

1.a. Company Description

Teekay Corporation engages in the international crude oil and other marine transportation services worldwide.The company provides a full suite of ship-to-ship transfer services in the oil, gas, and dry bulk industries; lightering and lightering support; and operational and maintenance marine, as well as offshore production services.As of March 1, 2022, it operated a fleet of approximately 55 vessels.

The company primarily serves energy and utility companies, major oil traders, large oil consumers and petroleum product producers, government agencies, and various other entities that depend upon marine transportation.Teekay Corporation was founded in 1973 and is headquartered in Hamilton, Bermuda.

Show Full description

1.b. Last Insights on TK

The recent 3-month performance of Teekay Corporation was driven by a favorable business environment, with the company poised to capitalize on elevated tanker rates due to a supply glut in the oil market. The OPEC+ decision to increase oil production has led to a surge in tanker rates, benefiting Teekay Tankers significantly. Additionally, the company's robust balance sheet, with approximately $530 million in cash and minimal debt, enables potential share repurchases and dividend boosts. Furthermore, the Teekay Group's announcement of a special dividend in May and July 2025 is expected to yield substantial dividends for investors.

1.c. Company Highlights

Last Price	9.58
Change Percentage	-0.05%
Open	9.57
Previous Close	9.59
Market Cap ( Millions)	817
Volume	32645
Year High	10.6
Year Low	5.65
M A 50	9.12
M A 200	7.99

FCF Yield	29.45%
Dividend Yield	20.88%
ROE	7.90%
Debt / Equity	8.07%
Net Debt / EBIDTA	-258.35%
Price To Book	1.24
Price Earnings Ratio	10.3
Price To FCF	3.4
Price To sales	0.82
EV / EBITDA	0.06

2. Teekay Tankers' Strong Q3 Earnings Exceed Expectations

Teekay Tankers reported its best quarter in the last 12 months with GAAP net income of $92.1 million or $2.66 per share and adjusted net income of $53.3 million or $1.54 per share in Q3 2025. The actual EPS came out at $0.03, beating estimates of -$0.13. The company's third-quarter spot rates remained counter-seasonally strong, with rates above the historical average, generating approximately $69 million in free cash flow from operations. The strong financial performance was driven by the increase in global crude oil production and exports, underpinning the recent strength in spot tanker rates.

Publication Date: Nov -26

                                    📋 Highlights
                                    Strong Q3 2025 Earnings:
                                                GAAP net income of $92.1M ($2.66/share) and adjusted net income of $53.3M ($1.54/share).
High Free Cash Flow Generation:
                                                $69M in free cash flow from operations driven by above-average spot rates despite counter-seasonality.
Robust Cash Position:
                                                $775M in cash with zero debt, enabling disciplined fleet growth and capital returns.
Strategic Fleet Transactions:
                                                Sold four Suezmax tankers for $158.5M, anticipating $47.5M book gain, while acquiring a modern Suezmax and 50% of a VLCC.
Low Breakeven and Rate Lock-In:
                                                Free cash flow breakeven of $11,300/day; locked in spot rates of $63,700/day (VLCC), $45,500/day (Suezmax), and $35,200/day (Aframax/LR2).

                                

Operational Highlights

The company has completed the acquisition of one modern Suezmax and the remaining 50% ownership interest in a VLCC, while selling four Suezmax tankers with a combined gross proceeds of $158.5 million, expecting an estimated book gain of $47.5 million. Teekay Tankers has secured spot rates of $63,700, $45,500, and $35,200 per day for its VLCC, Suezmax, and Aframax/LR2 fleets, respectively, with approximately 47% to 54% of spot days booked.

Balance Sheet and Dividend

Teekay Tankers ended the quarter with a cash position of $775 million and no debt, providing capacity for disciplined accretive fleet growth. The company declared a regular fixed dividend of $0.25 per share, continuing its commitment to returning capital to shareholders through its quarterly dividend. The strong balance sheet and low cash flow breakeven of $11,300 per day demonstrate the company's operating leverage.

Valuation and Growth Prospects

The current valuation metrics indicate a relatively low P/E Ratio of 1.87 and P/B Ratio of 0.19, suggesting that the stock may be undervalued. With a Dividend Yield of 20.06% and Free Cash Flow Yield of 28.3%, Teekay Tankers offers an attractive return to investors. However, analysts estimate next year's revenue growth at -15.2%, which may impact the stock's performance. The company's focus on investing in its core franchise and accelerating its pace of fleet renewal going forward may help offset potential declines.

Strategic Outlook

Teekay Tankers prioritizes value creation over valuation, focusing on a strong balance sheet, low cash flow breakeven, and a robust operating platform. The company opportunistically engages in time charter agreements, locking in favorable rates, and may consider more such agreements given elevated rates near term in 2026. As the company continues to build intrinsic value, its strong position in generating cash flows in the spot market is expected to drive long-term growth.

3. NewsRoom

American Century Companies Inc. Raises Position in Teekay Corporation Ltd. $TK

Dec -03

Source: defenseworld.net

Teekay Corporation Ltd. $TK Shares Bought by Envestnet Asset Management Inc.

Nov -21

Source: defenseworld.net

Teekay Tankers Ltd. $TNK Shares Purchased by Y Intercept Hong Kong Ltd

Nov -04

Source: defenseworld.net

Teekay Corporation Ltd. (TK) Q3 2025 Earnings Call Transcript

Oct -30

Source: seekingalpha.com

Teekay Corporation Ltd. Third Quarter 2025 Update

Oct -29

Source: globenewswire.com

Teekay Tankers Ltd. Reports Third Quarter 2025 Results and Declares Dividend

Oct -29

Source: globenewswire.com

Teekay Tankers: Vessel Sales Confirm NAV Discount

Oct -22

Source: seekingalpha.com

Teekay Group to Announce Third Quarter 2025 Earnings Results on October 29, 2025

Oct -21

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.28%)

6. Segments

Conventional Tankers

Expected Growth: 10%

Teekay Corporation's Conventional Tankers segment growth is driven by increasing global oil demand, rising crude oil production, and growing seaborne trade. Additionally, the company's modern fleet, operational efficiencies, and strong relationships with major oil companies contribute to its growth. Furthermore, the segment benefits from a favorable tanker market, characterized by low vessel supply growth and increasing charter rates.

Marine Services and Other

Expected Growth: 14%

Teekay Corporation's Marine Services and Other segment growth of 14% is driven by increasing demand for offshore oil and gas exploration, rising LNG production, and growing need for marine transportation services. Additionally, the company's strategic acquisitions and investments in new vessels, as well as its focus on operational efficiency, have contributed to the segment's growth.

7. Detailed Products

Offshore Production

Teekay Corporation provides offshore production services through its FPSO (Floating Production, Storage and Offloading) units, which are used to extract oil and gas from offshore fields.

Offshore Accommodation

Teekay Corporation offers offshore accommodation services, providing living quarters and support services for workers on offshore oil and gas platforms.

Shuttle Tankers

Teekay Corporation operates a fleet of shuttle tankers, which are used to transport oil from offshore production facilities to onshore terminals.

FPSO (Floating Production, Storage and Offloading) Units

Teekay Corporation designs, builds, and operates FPSO units, which are used to extract, process, and store oil and gas from offshore fields.

LNG (Liquefied Natural Gas) Services

Teekay Corporation provides LNG services, including transportation, regasification, and storage of LNG.

8. Teekay Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Teekay Corporation operates in the marine transportation industry, which has a moderate threat of substitutes. While there are alternative modes of transportation, such as pipelines and trucks, they are not always feasible or cost-effective for the transportation of oil and gas products.

Bargaining Power Of Customers

Teekay Corporation's customers, primarily oil and gas companies, have limited bargaining power due to the specialized nature of the marine transportation services provided.

Bargaining Power Of Suppliers

Teekay Corporation's suppliers, including shipbuilders and equipment providers, have a moderate level of bargaining power due to the availability of alternative suppliers and the company's dependence on a few key suppliers.

Threat Of New Entrants

The threat of new entrants in the marine transportation industry is low due to the high barriers to entry, including significant capital requirements and regulatory hurdles.

Intensity Of Rivalry

The marine transportation industry is highly competitive, with several established players competing for market share. Teekay Corporation faces intense rivalry from companies such as Frontline Ltd. and Nordic American Tankers Ltd.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	23.48%
Debt Cost	7.05%
Equity Weight	76.52%
Equity Cost	7.05%
WACC	7.05%
Leverage	30.68%

11. Quality Control: Teekay Corporation passed 6 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Teekay

A-Score: 7.0/10

Value: 9.4

Growth: 6.2

Quality: 7.5

Yield: 10.0

Momentum: 3.5

Volatility: 5.3

1-Year Total Return ->

DHT Holdings

A-Score: 6.6/10

Value: 5.6

Growth: 7.6

Quality: 7.2

Yield: 10.0

Momentum: 3.0

Volatility: 6.3

1-Year Total Return ->

Global Partners

A-Score: 6.0/10

Value: 6.9

Growth: 3.9

Quality: 3.1

Yield: 10.0

Momentum: 5.0

Volatility: 7.0

1-Year Total Return ->

Genesis Energy

A-Score: 5.8/10

Value: 7.0

Growth: 3.4

Quality: 1.5

Yield: 9.0

Momentum: 7.5

Volatility: 6.3

1-Year Total Return ->

Dorian LPG

A-Score: 5.7/10

Value: 5.2

Growth: 6.8

Quality: 5.5

Yield: 10.0

Momentum: 2.5

Volatility: 4.3

1-Year Total Return ->

Overseas Shipholding Group

A-Score: 4.2/10

Value: 6.6

Growth: 5.9

Quality: 5.3

Yield: 0.0

Momentum: 5.0

Volatility: 2.7

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-11.63%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

7.05%

Teekay Corporation - MHY8564W1030

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on TK

1.c. Company Highlights

Higher Yield

Better Quality

Cheaper

Strong Momentum

Weak Momentum

Stable Momentum

Average Quality

Average Growth

2. Teekay Tankers' Strong Q3 Earnings Exceed Expectations

Operational Highlights

Balance Sheet and Dividend

Valuation and Growth Prospects

Strategic Outlook

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.28%)

6. Segments

Conventional Tankers

Expected Growth: 10%

Marine Services and Other

Expected Growth: 14%

7. Detailed Products

Offshore Production

Offshore Accommodation

Shuttle Tankers

FPSO (Floating Production, Storage and Offloading) Units

LNG (Liquefied Natural Gas) Services

8. Teekay Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Teekay Corporation passed 6 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

9.58$

Current Price

9.58$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA