Dorian LPG Stock: The Energy Dividend Play You Can’t Afford to Overlook

by | Apr 22, 2024 | Markets

Dorian LPG is a small-cap company, but you’ll be surprised to discover its big-time earnings growth and hefty dividend yield. So, stick around as we delve into what might just be the best energy-sector opportunity of 2024.

Dorian LPG Stock: The Energy Play You’re Missing Out On

Surely, you’ve noticed that gasoline prices have moved up this year. With the summer travel season approaching, energy prices could continue to rally. The most obvious play for rising petroleum prices might be a Big Oil company stock, but I encourage you to take a look at Dorian LPG.

Just to recap, Dorian LPG transports liquefied petroleum gas through a fleet of tankers, or more precisely, very large gas carriers. A tanker business like Dorian LPG could certainly benefit from strong petroleum demand.

If you’re going to wager on a tanker company, Dorian LPG is a great choice. Dorian LPG’s earnings growth is quite impressive.

In the first quarter of fiscal 2024, the company’s adjusted net income totaled $17.2 million, or 43 cents per diluted share. Then, Dorian LPG reported adjusted net income of $75 million, or $1.85 per share, in the second quarter.

It got even better from there. In the third quarter, Dorian LPG’s adjusted net income jumped to $106 million, or $2.62 per share. Clearly, this tanker specialist is on a strong growth trajectory.

Dorian LPG: This Value-and-Yield Combo Is Hard to Beat

Earlier, I teased Dorian LPG stock as a great pick for value and passive-income investors, and I wasn’t kidding. You could search high and low, but you’d be hard-pressed to find a better all-around opportunity in the energy space.

Dorian LPG truly is the full package. The company offers a forward annual dividend yield of around 10%, assuming the company continues to pay $1 per quarter ($4 per year) and the share price is approximately $40. Meanwhile, the energy sector average forward annual dividend yield is 3.752%.

Now, here’s a tidbit for value seekers. In the energy sector, the median GAAP trailing 12-month price-to-earnings ratio is 11.36x. Dorian LPG’s P/E ratio is just 5.22x., but then, that’s what can happen when a company’s earnings are robust while the share price is still reasonable.

LPG Stock: Ideal for a Rising-Energy-Price Environment

Are you bullish on energy prices, and especially oil prices? That’s not an absolute prerequisite, but it’s definitely helpful if you want to invest in Dorian LPG with confidence.

That being said, I encourage you to conduct your due diligence on Dorian LPG today. The company pays a generous dividend and isn’t too richly valued.

Consequently, after you’ve done your research, feel free to grab a handful of LPG stock while they’re still relatively cheap.

On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

David Moadel has provided compelling content – and crossed the occasional line – on behalf of Motley Fool, Crush the Street, Market Realist, TalkMarkets, TipRanks, Benzinga, and (of course) InvestorPlace.com. He also serves as the chief analyst and market researcher for Portfolio Wealth Global and hosts the popular financial YouTube channel Looking at the Markets.

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